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Intel's 7nm Delay Materially Positive For AMD, Says BofA Analyst

Shanthi Rexaline

The biggest beneficiary of Intel Corporation's (NASDAQ: INTC) 7nm product delay is archrival Advanced Micro Devices, Inc. (NASDAQ: AMD), and an analyst at BofA Securities hiked their AMD price target Monday on this premise. 

The Semiconductor Analyst: Vivek Arya reiterated a Buy rating on AMD shares and increase the price target from $65 to $77.

The AMD Thesis: The 7nm delay could accelerate AMD market share gains back toward their historical peaks of 20% for PC and 25% servers, up from 17% and 10%, today, Arya said in a Monday note. (See his track record here )

AMD is on track to achieve earnings power of $3-plus by 2023, suggesting a CAGR of 43%, the analyst said. 

Given elevated expectations going into AMD's earnings report on Tuesday, there could be some profit-taking, Arya said.

The analyst said he has higher confidence in AMD's medium/longer-term prospects.

Intel's Q2 Outperformance Positive For Computing Peers? Intel delivered a strong second quarter thanks to solid cloud and resilient PC segments, Arya said.

This bodes well for compute peers AMD, and Xilinx, Inc. (NASDAQ: XLNX), which is due to report Thursday, the analyst said. 

Strong 5G trends from Analog Devices, Inc. (NASDAQ: ADI) and Texas Instruments Incorporated (NASDAQ: TXN) also have a positive read-through for Xilinx, he said. 

AMD, INTC, XLNX Price Action: AMD shares were trading down 0.89% to $68.78 at last check Monday, while Intel shares were down 1.06% at $50.06.

Xilinx shares were trading 3.77% higher at $106.53. 

Related Links:

Nvidia, AMD Are Key Gaming Beneficiaries Ahead Of New Microsoft, Sony Consoles: BofA

Why Key Intel Chip Design Exec's Departure Is Positive For AMD, Nvidia

Latest Ratings for AMD

Date

Firm

Action

From

To

Jul 2020

B of A Securities

Maintains

Buy

Jul 2020

Deutsche Bank

Maintains

Hold

Jul 2020

Barclays

Maintains

Equal-Weight

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