AMD’s Outlook Helps Lift Semiconductor ETFs
This article was originally published on ETFTrends.com.
Semiconductor ETFs were among the few areas of strength coming off the long weekend as Advanced Micro Devices (AMD) surged on an improving market outlook.
On Tuesday, the VanEck Vectors Semiconductor ETF (SMH) rose 0.1% and the iShares PHLX Semiconductor ETF (SOXX) added 0.2%.
Advanced Micro Devices helped prop up the sector after several analysts grew more optimistic over the future market share for the chipmaker. For example, Jefferies raised its price target on AMD to $30 per share from $22 based on its technological advantage over Intel, CNBC reports.
Cowen & Co. analyst Matthew Ramsay also raised his price target on the stock to $30 from $25, arguing "a tough setup for the bear thesis" given the company has either overcome or overcome a number of obstacles, MarketWatch reports.
Rosenblatt Securities previously raised its price target for AMD to $30 from $27, also pointing to company's process manufacturing advantage compared to Intel.
Analyst Mark Lipacis said in a note that AMD will have a chip with higher transistor density than Intel for the first time in recent history by the second half of next year. "We see this as a foundational shift in competitive dynamics. Meanwhile, our checks also suggest that AMD continues to take share in high-end notebooks," Lipacis said.
AMD shares jumped 9.1% Tuesday.
AMD is expected to beat Intel to market with a more advanced chip. Intel stated that its 10 nanometer chips will be released for holiday 2019 after delays pushed back plans to roll them out earlier. Meanwhile, AMD is anticipated to have 7 nanometer next-gen server chips next year. Smaller nanometer chipmaking technologies have allowed companies to create faster and more efficient chips.
AMD makes up 4.9% of SOXX's underlying portfolio and 5.1% of SMH's holdings.
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