RBC Capital Markets began coverage of AMD on Monday, saying the steady demand for gaming chips in addition to also also the company’s solid gains from the server market make the stock underrated.
“While we think the stock will remain volatile, we note in which AMD trades at a notable discount on a sales basis relative to peer Nvidia,” RBC analyst Mitch Steves said in a note.
Shares of AMD ended the day 5.2 percent higher in trading at $32.62 a share. RBC has an outperform rating in addition to also also a cost target of $40 a share on the company’s stock, which is usually about 29 percent above AMD’s closing cost Friday of $31.02 a share.
AMD’s latest graphics processor “is usually competitive,” Steves said, in addition to also also he expects “the second generation should surpass Intel via a performance vs. cost basis.” RBC said the potential for AMD to continue to gain from the server market may steadily add “high margin revenue.”
“This kind of gives us belief from the AMD product cycle in addition to also also potential to gain market share,” Steves added.
RBC joins several analysts on Wall Street becoming more optimistic about future market share gains for AMD. The chipmaker’s stock is usually significantly outperforming the market This kind of year. Its shares are up 202 percent year to date through Friday.