Advanced Micro Devices rises as RayJay upgrades on share gains, valuation
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Advanced Micro Devices (NASDAQ:AMD) shares rose in premarket trading on Monday after investment firm Raymond James upgraded the semiconductor maker, citing several reasons, including an attractive valuation.
Analyst Chris Caso upgraded the stock to strong buy from outperform but kept the $160 price target unchanged, noting that AMD is exposed to several secular growth areas, has a more "muted" cyclical exposure than other semiconductor stocks and has an attractive valuation. 
"We have strong confidence regarding AMDâs position and share gains in the datacenter market," Caso wrote in a note to clients, adding that the technology gap between AMD and Intel (NASDAQ:INTC) is likely to widen when AMD releases its Genoa line of chips in the fourth-quarter.
Advanced Micro Devices (AMD) shares rose slightly less than 0.5% to $88.53 in premarket trading.
Concerning Genoa, Caso said its likely this line of chips helps AMD (AMD) further gain market share in the datacenter space, both in cloud and enterprise, mostly due to the fact that AMD is now using 5 nanometer node from Taiwan Semiconductor (NYSE:TSM).
It's likely that AMD maintains an advantange "at least through 2024," Caso stated, with customers realizing that Intel's (INTC) roadmap has "more risk" due to its "challenging process roadmap" and capacity constraints causing customers to commit to AMD now.
"Finally, even if [Intel] executes flawlessly and eventually catches up to [Taiwan Semiconductor], the best case scenario is that [Intel] and AMD remain close to parity â which means INTCâs current share (72% cloud, >90% enterprise) isnât sustainable."
Concerning AMD's (AMD) exposure to PCs, Caso said the market is likely to become a "sustained duopoly over time," assuming Intel (INTC) executes flawlessly. Nonetheless, there is some consumer weakness going on in the space, which may be impacting shares.
AMD's (AMD) acquisition of Xilinx may also be a concern for investors, given Caso's worries over it growing revenue 35% year-over-year. 
"But we do expect XLNX to be mildly accretive, and we note that just 1% of client share gain would offset a 5% decline in the overall market, demonstrating that share is a much more important lever for AMD than market growth," Caso added. 
Earlier this month, Bank of America said that weakness from the PC market "could already be baked-in" to the stocks of both Intel (INTC) and Advanced Micro Devices (AMD).