Advanced Micro Devices' price target raised at Jefferies on strong Q4
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Advanced Micro Devices (NASDAQ:AMD) shares surged in early trading on Wednesday after it posted fourth-quarter results and gave first-quarter guidance that prompted Jefferies to raise its price target on the semiconductor company.
Analyst Mark Lipacis raised his price target to $155, up from $145, and reiterated a buy rating, noting that AMD continues to take market share in server gains and in the cloud, at the expense of Intel (NASDAQ:INTC).
"We estimate AMD server CPU revs increased by 14% [sequentially] vs [Intel] at 12% in 4Q21," Lipacis wrote in a note to clients. "We estimate that the share gain discrepancy for AMD on revenues and units is due to [Intel] benefiting from ASP increases in the ramp of its Ice Lake CPUs in 4Q21. We believe AMD's share gains within the cloud segment of server were greater than overall server gains, as AMD reported it had doubled cloud revenues [year-over-year] as CSPs expanded internal deployments and instances. This contrasts with INTC whose cloud revenues declined 5% YY."
That discrepancy is likely to continue in the first-quarter, which should benefit the Dr. Lisa Su-led AMD, Lipacis added.
"For 1Q22, we model INTC server revenues to decline ~7% QQ and AMD's to increase by 14% QQ," the analyst explained. "We believe share gains in 1Q22 next quarter will be 200-300bps, consistent with our thesis that its server share gains would accelerate to 200-300bps/qtr from 50-100bps/qtr. While AMD remains more cloud-weighted in servers, AMD's enterprise growth also doubled YY in 4Q21."
Following AMD's (AMD) fourth-quarter results, Wedbush Securities called it a clean print that produced "zero red flags."