Plans for Advanced Micro Devices, Inc. (NASDAQ: AMD) technology to be used in Microsoft Corporation (NASDAQ: MSFT)’s next-generation gaming console are a positive for the chipmaker, Wells Fargo said Monday.
Why It's Important
The use of AMD technology in the next-generation Xbox, code-named Project Scarlett, was expected. But it reinforces AMD in the high-end processor and graphics market for game consoles, Wells Fargo analyst Aaron Rakers said in a note as gaming watchers analyzed the industry’s biggest trade show, the Electronic Entertainment Expo, or E3, in Los Angeles.
Previous console use proved important for growth for AMD’s Graphics and Visual Solutions revenue, and is expected to provide a similar boost in 2020, Rakers wrote, adding that Wells Fargo sees its 10 percent growth estimate for 2020 as very conservative.
Microsoft provided updates on Project Scarlett at E3, saying the new console will launch in time for the 2020 holiday season along with the "Halo Infinite" game.
Rakers has AMD rated Outperform with a price target of $38.
AMD's stock traded up 2.5 percent to $33.22 Monday afternoon.
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