Channel Checks Support The Bull Thesis On Advanced Micro Devices

Recent checks in the Asia PC supply chain point toward a “systemic turnaround” at Advanced Micro Devices, Inc. (NASDAQ: AMD), backed by higher responsiveness, better execution, enthusiasm for the Zen Desktop MPUs and positive expectations for Zen Server, Jefferies’ Mark Lipacis said in a report.

While reiterating a Buy rating and price target of $16 for Advanced Micro Devices, Lipacis wrote, “The checks give us higher conviction in our above consensus estimates.”

Higher Responsiveness, Better Execution

Recent checks indicate a significant change in the company’s process and execution since CEO Lisa Su took over 2.5 years ago. Advanced Micro Devices seems to have become “more responsive to PCODM questions and issues,” and there appears to be “a higher level of trust in AMD's ability to execute,” the analyst mentioned.

Positive Zen Desktop Reception

The new Zen Desktop MPU benchmarks favorably versus Intel Corporation (NASDAQ: INTC)'s MPUs.

Positive Zen Server Expectations

“Our sources view a positive Zen Desktop launch as leading indicator for the Zen server launch, given that the DT and server MPU architectures are similar,” Lipacis said. He added, however, that a mid-year launch of Zen Server would likely not translate to a significant ramp until fourth-quarter 2017.

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Image Credit: Advanced Micro Devices, Inc. (AMD) [Attribution], via Wikimedia Commons