The market’s best-performing stock last year still has more upside, according to Mizuho Securities.
Advanced Micro Devices (ticker: AMD) makes processors that act as the main computing brains for personal computers, servers, and graphics cards. The chip maker’s stock rose 148% last year. That performance ranked number one for the entire S&P 500 index for 2019, according to FactSet.
On Wednesday, Mizuho Securities analyst Vijay Rakesh raised his rating for AMD shares to Buy from Neutral, predicting big share gains for its chips this year. He also increased his price target for the stock to $55 from $38.
“We believe AMD is well positioned and has significant opportunity to capitalize on Intel’s. ..missteps,” he wrote.
AMD stock rose 4.2% to $49.84 on Thursday.
The analyst predicts AMD’s processors will do well later this year. He estimates the chip maker’s server market share will rise to 9.1% at year-end versus 4.8% last year. Rakesh is also optimistic over the company’s chip business with gaming console makers— Microsoft (MSFT) and Sony (SNE).
“We see significant opportunities, with coming 2H20E [second-half 2020] console launches from Sony PS5 and Microsoft Xbox Series X,” he wrote.
Last July, the chip maker launched its latest lineup of 7-nanometer (nm) processors that have gained traction in the marketplace. Its main competitor Intel (INTC) primarily offers 14nm desktop chips. Smaller-nanometer manufacturing processes have historically allowed semiconductor companies to create faster, more power-efficient chips.