AMD price forecast: Bernstein sees upside to $150 a share

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Shares of Advanced Micro Devices Inc (NASDAQ: AMD) are up 3.0% on Tuesday after a Bernstein Research analyst upgraded the stock to “outperform” – his first top rating for AMD in ten years.

Rasgon’s comments on CNBC’s ‘Halftime Report’

Stacy Rasgon now has a price target of $150 on the American multinational semiconductor company that represents a 30% upside from here. Defending his bullish call on CNBC’s “Halftime Report”, he said:

AMD is down 20% year-to-date. Price to forward earnings multiple is down 50% off its November peak; the earnings are actually up 30%. The stock today is about under 30 times the next 12-month price to forward earnings. Their share is increasing, their mix is still improving.

Other reasons that he’s bullish on AMD include the $50 billion acquisition of Xilinx that he says the Street is underestimating. Rasgon expects revenue from this deal to be much higher than the expectations.

Why else did he upgrade the stock?

Earlier this month, AMD gave strong guidance for 2022. According to the Bernstein analyst, his “outperform” rating on the stock stemmed also from Intel’s comments around data centre at its analyst day last week. He added:

Intel said it’s open season on data centre for next several years. It pushed out Granite Rapids from 2023 to 2024. It’s backfilling it with another product which isn’t as good. They’re basically saying their own server room is deficient, and they acknowledge they’re going to lose share at least through 2023.

Advanced Micro Devices now has a 20% market share in CPUs versus under 5.0% only six years ago. The growing share, on the fundamental side, is the basis of Rasgon’s bullish call on the stock.

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