AMD (AMD) Shares Poised to Double - Barron's
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Shares of Advanced Micro Devices, Inc. (NYSE: AMD) are higher early Monday following a bullish Barron's article over the weekend, highlighting the SeaMicro deal and Dan Niles bullish take on the stock.
AMD's 2012 acquisition of SeaMicro could be a very important milestone in the company's turnaround efforts, Barron's contends. The deal provides the company an opportunity to take share in the server-computer market, which is currently 96% controlled by rival Intel (NASDAQ: INTC).
The market in focus for AMD is the brand-new "microservers," or sever on a chip, market. SeaMicro's founder Andrew Feldman is widely considered an expert in the field, having built his company teaching Intel how to better use its own chips.
AMD is using a new technology from ARM Holding (NASDAQ: ARMH) to build its new server on a chip technology and Feldman believes lower-priced ARM chips could take market share from Intel. He is not alone, even bullish Intel analysts believe that ARM-based parts will steal 10% of Intel's business by 2018.
While AMD is making a big bet on its server on a chip technology, they are not alone. Intel recently bought start-up Fulcrum Microsystem and has bought various product lines from Cray (NASDAQ: CRAY) and QLogic (NASDAQ: QLGC).
Commenting on the stock, AlphaOne Capital Partners's Dan Niles thinks shares could go over $8 per share. He sees this based on 2015 revenue growing to $7 billion and the multiple of enterprise value to trailing 12-month sales moving up from its current level of 0.7 times to 1.3 times - which is still a discount to Intel's 2.2 times number.
Shares of AMD are up 3.4 percent early.
AMD's 2012 acquisition of SeaMicro could be a very important milestone in the company's turnaround efforts, Barron's contends. The deal provides the company an opportunity to take share in the server-computer market, which is currently 96% controlled by rival Intel (NASDAQ: INTC).
The market in focus for AMD is the brand-new "microservers," or sever on a chip, market. SeaMicro's founder Andrew Feldman is widely considered an expert in the field, having built his company teaching Intel how to better use its own chips.
AMD is using a new technology from ARM Holding (NASDAQ: ARMH) to build its new server on a chip technology and Feldman believes lower-priced ARM chips could take market share from Intel. He is not alone, even bullish Intel analysts believe that ARM-based parts will steal 10% of Intel's business by 2018.
While AMD is making a big bet on its server on a chip technology, they are not alone. Intel recently bought start-up Fulcrum Microsystem and has bought various product lines from Cray (NASDAQ: CRAY) and QLogic (NASDAQ: QLGC).
Commenting on the stock, AlphaOne Capital Partners's Dan Niles thinks shares could go over $8 per share. He sees this based on 2015 revenue growing to $7 billion and the multiple of enterprise value to trailing 12-month sales moving up from its current level of 0.7 times to 1.3 times - which is still a discount to Intel's 2.2 times number.
Shares of AMD are up 3.4 percent early.
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