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The Ratings Game: AMD stock is a ‘buy’ as ‘impressive share-gain story is intact,’ analyst says in upgrade

Advanced Micro Devices Inc.’s “impressive share-gain story is intact,” and that’s one reason to feel good about the chipmaker’s stock, according to an analyst.

Daiwa Capital Markets analyst Louis Miscioscia upgraded AMD shares AMD, +3.60% to buy from outperform Wednesday, writing that the company set an upbeat tone with its most recent earnings report in early Feburary.

AMD “gave very strong guidance for 1Q22 and the full year, even after strong raises every quarter all year,” he noted, while taking a more bullish tone on the shares given a recent price decline. The stock is down about 18% from its Nov. 29 closing high of $161.91.

Miscioscia cheered AMD’s traction with cloud customers, which helped the company grow revenue for its enterprise, embedded, and semi-custom segment at a 75% clip in the latest quarter.

“Part of AMD’s continued growth is that they are seeing firm orders and good visibility in cloud demand for both internal applications and more instances, and as such have signed up for increased foundry capacity,” he wrote. “Intel INTC, +2.25% did return to growth in their most recent quarter, but it was off a very easy compare and much slower.”

Back in March 2020, AMD set a goal to grow annual revenue at or above 20% for the following three years, and the company is off to a good start with that target, having posted revenue growth of 45% and 68% in the past two years, respectively. The company’s 2022 outlook calls for 31% growth, Miscioscia noted.

“We continue to have a positive view about AMD’s long-term financial outlook,” he wrote.

AMD shares gained 3.6% in Wednesday’s session.

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