advanced micro devices (AMD) – Get a free report shares rose on Monday following an update from Barclays that seeks to extend last week’s rally in the chip sector.
Barclays analyst Blayne Curtis raised his rating of AMD to “overweight,” with a $15 improvement on his price target, now set at $85, citing the chipmaker’s advantage over rival Intel. (INTC) – Get a free report in the server market following the launch of its new Genoa data center product late last year. Chief Executive Officer Lisa Su said Genoa will translate to “lower capex, lower opex, and lower total cost of ownership” for enterprises and cloud data centers.
“Intel won’t have an answer until Granite Rapids/Sierra Forest, which is scheduled for 2024 but likely to arrive in 2025,” Curtis wrote, referring to that chipmaker’s sixth-generation Xeon platform and its new parallel-developed Xeon CPU.
Curtis also said that AMD could see the potential to generate profit from Meta Platforms when it ramps up spending later this year.
AMD shares rose 2% in premarket trading, after rising 3.5% on Friday, to signal an opening price of $71.45 apiece. The Philadelphia Semiconductor Index, the benchmark for the chip industry, rose 3.11% on Friday to extend its January gain to around 10.4%.
Late last year, AMD posted slightly weaker-than-expected third-quarter earnings of 67 cents a share, on revenue of $5.6 billion, but noted solid gains for its gaming and data center businesses that partly offset a further weakness expected in demand for personal computing chips. .
However, looking to the final months of the year, AMD said it sees quarterly revenue in the region of $5.5 billion, plus or minus $300 million, with gross margins rising to around 51% on sequential growth of its units. integrated and data center. Refinitv estimates called for a revenue forecast of around $5.85 billion.
Intel will post its fourth-quarter earnings on Thursday after the close of business, and analysts are looking for an adjusted bottom line of 20 cents a share on revenue of $14.47 billion.
Last fall, Intel said it sees overall revenue in the region of $63.5 billion, down from its previous forecast of between $65 billion and $68 billion.
The group also lowered its forecast for PC demand, both for this year and next, while detailing cost-cutting plans that it said would save $3 billion by 2023 and between $8 billion and $10 billion by 2025.
