Advanced Micro Initiated Buy; Benchmark Likes Competitive Position

AMD's management and competitive position get praise from a Benchmark analyst, who initiates coverage of the chipmaker at buy.

Author:: Rob Lenihan
Publish date:: May 28, 2021 10:55 AM EDT

Advanced Micro Devices (AMD) - Get Report was higher Friday after Benchmark initiated coverage of the chipmaker with a buy rating and $100 price target.

Shares of the Santa Clara, Calif., company at last check were 2.6% higher at $80.43.

Stocks Rise as Wall Street Looks Past Faster Inflation on May's Last Session

Analyst Cody Acree said in a research note that AMD's management, led by Chief Executive Lisa Su, "has developed a base processor architecture (Zen), and its generational improvements, that have proven over the last few years to be highly competitive - and often superior - to Intel’s (INTC) - Get Report designs, particularly with AMD using Taiwan Semiconductor’s (TSM) - Get Report most advanced commercial volume lithography process."

In January Su unveiled the Ryzen 5000 Zen 3 series, a new generation of mobile and desktop gaming chips.

RealMoney's Mark Sebastian: Here's the Option Play on AMD

"While Intel has struggled to respond with a trump architectural offering, its biggest challenge ... has been that Intel mismanaged its pace of bleeding-end manufacturing technology, leaving the company at a disadvantage to the leading foundry providers," Acree said.

With Intel somewhat handcuffed, the analyst added, "AMD has been able to capitalize on the opportunity and has been gaining broad market share over the past few years."

"We expect the firm’s leadership to continue to drive share gains for at least the next few years," Acree said.

Earlier this month, AMD said it was going to repurchase as much as $4 billion of outstanding stock.

In April, AMD reported better-than-expected first-quarter earnings Tuesday and forecast solid near-term sales. Also in April, shareholders approved the company's $35 billion deal to acquire Xilinx (XLNX) - Get Report.

Jim Cramer: Buy AMD After Earnings Report

Advanced Micro Devices is a component of the Action Alerts PLUS Growth Index. For more information about how you can profit using this and all of the Action Alerts PLUS portfolio indexes, please click here.