The upgrade comes a week ahead of Advanced Micro Devices’s Q3 call
Advanced Micro Devices, Inc. (NASDAQ:AMD) has been recently upgraded by Credit Suisse, as the research firm believes that the stock has plenty of positive catalysts down the road that will provide long term benefits. Credit Suisse analyst, John Pitzer, believes that recent traction in NT has negated the negativity that was created due to fierce competition in the past few quarters.
The analyst believes that the most common investor concern in the long term was the lack of scale but with the recent strong results from NT, it has been answered for the most part. Furthermore, the recently launched Graphics Processing Units (GPUs), especially the VR ready RX480, are expected to be a huge hit, assuming highly attractive price performance ratio. Given the recent positives, the analyst believes that Advanced Micro Devices might very well be ahead of the guidance numbers for the next two quarters, Q3 and Q4. On the other hand, Advanced Micro Devices has not been able to post positive EPS for the past few quarters but the analyst expects it to take a turn for the better, and the upcoming Q3 EPS might be a tad higher than the consensus estimate of breakeven.
Recent financing has significantly improved the financial position of the company and the balance sheet looks far more positive than it used to be. The product pipeline of the company for the next year is quite strong, among which Zen is the most crucial. The IP assets of Advanced Micro Devices are expected to still hold some meaningful value and monetization is possible in near term.
Credit Suisse upgrades the stock to Neutral from Underperform and raises the price target to $7 from $5.5. The analyst ratings for the stock consist of 4 Buy, 3 Outperform, 12 Hold, 3 Underperform and 3 Sell ratings. The stock currently trades at a price of $6.57 and gained 1.08% since the open.