Advanced Micro Devices (AMD) Stock Gains With INTC Shaking!

Advanced Micro Devices AMD Stock News

Advanced Micro Devices, Inc. (NASDAQ: AMD) is flying this morning after taking yet another jab at Intel Corporation (NASDAQ: INTC). AMD is currently trading on gains of more tahn 12% after launching a new product that could lead to dramatic gains in its server market share. Here’s what’s going on:

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AMD Stock Rips On Product Launch Challenging INTC

News is breaking this morning surrounding a new product launch by Advanced Micro Devices. The product is the company’s second-generation Epyc 2 server chip.

Known as Rome, many believe that this chip will give the company a competitive advantage, leading to a substantial increase in the market share on the server side.

In fact, some experts believe that the new chip will lead to AMD taking more than 20% of the server chip market share. Of course, this means that the company will dive deep into the pockets of INTC.

INTC Blues Turn AMD Green!

For Intel, the blues are hitting hard. In fact, the company recently announced that its 10-nanometer server chips would be delayed until well into the year 2020. These delays may be bad for Intel investors, but Advanced Micro Devices investors are loving them.

At the end of the day, the blues at INTC give AMD an opporutinty to get ahead of its toughest competition in the server space. So, not only does the company have a compelling new product, it has an open court where it has months, and possibly longer to shoot as many free throws as it wants!

In a statement, Bernstein analyst Stacy Rasgon, had the following to offer about the news from AMD:

Now we always take first-party benchmarks with a grain of salt (they are easy to game), but we have to say AMD AMD, +11.85% went all-out to tell a good story yesterday; we admit they sounded very good. Especially given Intel’s disclosure of further 10-nanomater server delays, the announcements yesterday will likely keep AMD in full control of the datacenter narrative for now.

Rasgon is one of the more modest analysts on the stock, rating it a Market Perform and giving it a $25 price target. She went on to say:

[I think] investors purchasing AMD here are already implicitly underwriting scenarios that credit the company with significant success well beyond what has already been promised, with aggressive near-term expectations as well.

Wells Fargo analyst Aaron Rakers, one with a more bullish opinion sees great things ahead. He rates the stock an Outperform with a $40 price target. IN a statement, Rakers said:

[The Roam launch] should provide investors with increased confidence in the company’s positioning to garner a 20%+ share in the server CPU market.

The Bottom Line

The bottom line here is a simple one. AMD just took a big stab at INTC. While company’s competitor is limping, it decided to launch the latest and greatest in server chips. Between the technology and the timing, the competitive advantage held by AMD is hard to ignore!

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