AMD (AMD) Server Share Gains Are Continuing, Jefferies Reiterates Buy
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Jefferies analyst Mark Lipacis reiterated a Buy rating and $110.00 price target on AMD (NASDAQ: AMD) after Mercury data indicates that share gains are continuing. According to Mercury, in 4Q20, AMD gained 50bps and 290bps of CPU revenue share Q/Q in servers and desktops respectively, and lost 60bps of revenue share in notebooks. on a Y/Y basis, AMD gained 370bps of server revenue share.
The analyst stated "We expect AMD's server share gains to accelerate as AMD ramps its 7nm Milan CPUs in 1Q21 and 5nm Genoa CPUs in '22." He went on to state "We estimate AMD earnings power of $4.80 in the 30% share scenario, and $7.25 in the 50% share scenario. We think that investors will start considering the 50% share scenario over the next 12-18 months. Our $110 price target assumes a 15x P/E on our 4-to-5 yr earnings power of $7.25, or 23x our 2-to-3 yr earnings power of $4.80."
Shares of AMD closed at $89.00 yesterday.
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