Shares of semiconductor giant Advanced Micro Devices (NASDAQ:AMD) dropped on Wednesday after it provided third-quarter guidance that was below Wall Street expectations, but numerous analysts nonetheless praised the business’s performance.
The data and outlook were deemed impressive by Morgan Stanley analyst Joseph Moore, who has an overweight rating on AMD (NASDAQ:AMD) shares and a $102 price target.
Moore explained that while he understood investor disappointment he continues to like the opportunity AMD (NASDAQ:AMD) presents in the market.
He added that while no part of the semiconductor market is riskless right now, he believes AMD is trading at a severe discount to other growth names.
Despite the positive views of analysts like Moore, AMD (AMD) shares dropped close to 6% to $93.52 in early trading.
Results Labeled “Below Standard”
With regard to Intel’s (NASDAQ:INTC) most recent results, which Chief Executive Pat Gelsinger described as “below standard,” Moore also mentioned that AMD (AMD) continued to expand its client CPU business from the first quarter, a fact he considered pretty remarkable in and of itself.
Despite the challenging market conditions, according to Moore, AMD (NASDAQ:AMD) is likely to continue profiting from Intel’s (NASDAQ:INTC) delays in many areas, in particular singling out server momentum and the CPU market.
According to second-quarter results from AMD (AMD), the company now holds about mid-20% of the server market, including mid-to-high 30% of the hyper-scale cloud market, and is likely to continue expanding its market share among traditional enterprise OEMs, according to Wells Fargo analyst Aaron Rakers.
As time goes on, Rakers noted, investors may continue to view AMD’s upcoming Zen 4 5nm 96-core Genoa EPYC CPU launch as a portfolio extension rather than a complete replacement of the company’s ramping 7nm Milan EPYC CPU product cycle.
AMD (NASDAQ:AMD) is gaining market share, despite the fact that both Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) present some long-term challenges, according to Truist analyst William Stein, who has a hold rating on AMD (AMD) shares. Stein noted that Nvidia (NASDAQ:NVDA) is still seen as a better investment due to its more consistent growth.
AMD (AMD) was also named last month by Wedbush Securities analyst Matt Bryson as his top pick in the semiconductor industry.
Featured Image: Megapixl @Andreistanescu
