Advanced Micro Devices stock is still a winner despite the recent pullback in the chip sector, Piper Sandler says.
The PHLX Semiconductor Index, or SOX, which tracks chip stocks, has fallen about 19% so far this quarter, and AMD shares have slumped 12.7% so far this year.
However, Piper Sandler's Harsh Kumar and Robert Aguanno see opportunities for AMD, which remains their top large-cap stock pick.
Last week, Intel announced disappointing quarterly results and guidance, adding that it's cutting 15,000 jobs and suspending its dividend. That should help AMD pick up market share, Piper Sandler says,
"We see this transition continuing to take shape over the next several years as AMD generates additional wins at key customers at the expense of INTC," the analysts wrote Wednesday.
They predict AMD will snap up about 20% market share of the $400 billion accelerator market by 2028.
Piper Sandler rates AMD shares at Overweight with a price target of $175, which represents a roughly 35% premium from Tuesday's closing price of $130.
Beyond that, AMD stands to benefit if Nvidia is indeed struggling with a chip delay. Earlier this month, media reports said volume shipments of the Blackwell B200 chip would be delayed some three months. Nvidia has said production remains on track.
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