Chipmaker AMD shares jumped 7.06 per cent to $49.10 on Thursday, the highest close since 2000. The company is up nearly 150 percent in 2019, the biggest gain ercy to the Standard and Poor’s 500-stock index. The company’s shares have risen more than 70 per cent since its low in October.
Thursday’s share price rise comes after Nomura Instinet raised its target price for the stock to $58 from $40, and analyst David Wong expects AMD to “continue to strengthen its competitive position in 2020” due to new products, rising market share and higher average selling prices.
Nomura is the latest example of growing optimism among analysts. Earlier this week, Rosenblatt Securities raised its target price to $65 and listed AMD as the top pick for semiconductor stocks in 2020. This year “will continue the early CPU share growth momentum,” wrote Hans Mosesmann, who believes “limited competitive threats will slow the momentum.” RBC Capital Markets and Wedbush have also been bullish on the company’s prospects recently.
The stock’s average target price is nearly $37, well above the $22 it was about $22 in January 2019. Currently, 15 analysts have recommended buying the company’s stock, while only four have suggested selling, the fewest in more than a year.
AMD’s rise in 2019 is largely due to optimism surrounding new products. It released its latest generation of Ryzen desktop processors in May, followed by a new server processor in August. Both companies are seen as enhancing AMD’s competitive advantage over Intel. AMD also announced that it will be Microsoft’s main chip supplier for a video game console.
AMD’s share price will be tested later this month, when the company is expected to report fourth-quarter results. Wall Street expects adjusted earnings to nearly quadruple from a year earlier and nearly 50 percent in revenue growth.