As Advanced Micro Devices (AMD) gets ready to report its third-quarter earnings today after the close, Barclays says it sees the chipmaker taking significant market share from rival Intel (INTC). Indeed, 4.6-star analyst Tom O’Malley noted that AMD is making notable gains in pricing and market share. Nevertheless, he pointed out that there may be some risks in Q4 as growth is dependent on a strong server market, as well as an increase in PC demand and higher average selling prices.
O’Malley projects that AMD’s CPU shipments rose 9% quarter-over-quarter, while Intel’s shipments were slightly down. This could give AMD an extra 200 basis points in market share, a trend that he expects to continue into early 2025. The server market shows a similar pattern, with AMD likely seeing mid-teens growth versus Intel’s low-single-digit increase, which equates to AMD taking around 160 basis points of market share.
General Server Market’s Weakness May Reduce Q4 Estimates
However, O’Malley warned that the general server market’s weakness this year may put pressure on AMD’s non-AI server growth targets and potentially reduce Q4 estimates. Still, he expects stronger pricing from AMD’s new Turin launch (AMD’s 5th generation EPYC server processors) to help offset these risks with unit growth of around 7% and average selling price growth of 5%. This would translate into another 200 basis points in revenue share gains.
It’s worth noting that, so far, O’Malley has enjoyed a 64% success rate on AMD stock, with an average return of 28.5% per rating. In addition, he has a Buy rating on AMD with a $180 per share price target.
Is AMD Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMD stock based on 25 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 66% rally in its share price over the past year, the average AMD price target of $188.54 per share implies 15.5% upside potential.
