Investing.com - Advanced Micro Devices has been on a tear since its December low, up nearly 90%, but Oppenheimer delivered a caution note on the chipmaker and suggested there were better growth opportunities elsewhere, not least in rival Nvidia.
Advanced Micro Devices (NASDAQ:AMD) has been riding a wave optimism thanks partly to rival Intel (NASDAQ:INTC)'s chip-shortage woes. The chipmaker has been scooping up new business at the lower end of market, providing chips to manufacturers who haven't been able to source them from Intel.
But the growth from gains in the PC and server market is already baked in, leaving little room for further upside, Oppenheimer warned, sending the chipmaker's shares down 2.7%.
Despite maintaining its perform rating on AMD, the bank said it would remain on the sidelines, claiming that investors can find better growth and capital allocation opportunities elsewhere for the time being, not least in Nvidia (NASDAQ:NVDA).
Nvidia's revenue has returned to growth following the clearance of excess cryptocurrency mining inventory, the analyst said. Data center growth has cooled, but management is projecting inference will be a $20-billion market by 2023, Oppenheimer said, and reiterated his outperform rating on the stock.
"The tone of the meeting was confident, highlighting NVDA's leading position in core DC AI, gaming and autonomous growth verticals,” it added.