Time for AMD (AMD) to Step Up - Northland

Northland Capital Markets analyst, Gus Richard, thinks its time for AMD (NASDAQ: AMD) to step up its game if it wants to recapture marketshare and the first indication could be at Computex.

AMD’s fate is in its own hands. PC demand is weaker than expected in China but if AMD executes on its new Polaris graphics chip and its new Zen CPU, it can return to growth and positive cash flow from operations in 2H. Early indications are positive for Polaris but for Zen it is too soon to tell. No change to Outperform rating or $5 PT.

AMD's new Polaris graphics chip is expected to be shipping in volume around Computex at the beginning of June. Polaris was demonstrated at CES in January and has twice the performance per watt of the prior generation. AMD’s market share in graphic stabilized in CY15 at 25%.

Polaris is the company’s opportunity to recapture market share. The Zen processor is back from fab and AMD is working to bring up the silicon and verify functionality and performance. AMD will have a better handle on where Zen stands by the company’s next earnings conference call. The analyst expects Zen to sample by Computex and be targeted along with Polaris for high-end gamer desk tops for the Christmas season.

The server market could be meaningful for AMD since the company sits within Intel's server moat. if the Zen processor is in the same zip code in terms of performance, AMD should win market share as customers are desperate for a second source to Intel. No server revenue is expected this year but they think it could happen next year with an early indicator of success being penetration of high-end desktops in Q4:16.

For an analyst ratings summary and ratings history on AMD click here. For more ratings news on AMD click here.

Shares of AMD closed at $2.07 yesterday.

You May Also Be Interested In

• Goldman Sachs on Meta Platforms Inc. (META): 'We expect investors to have an initial negative reaction'
• Citi Upgrades United Microelectronics Corp (2303:TT) (UMC) to Buy 'with limited downside'
• Chipmakers in focus: Intel and AMD gear up for Q1 earnings report