What happened
Shares of Advanced Micro Devices (AMD 3.47%) jumped on Monday, following bullish analyst remarks. By the close of trading, AMD's stock price was up more than 9%.
So what
Barclays analyst Blayne Curtis placed an overweight rating on AMD's shares. He sees the chipmaker's share price rising roughly 11% to $85.
NASDAQ: AMD
Key Data Points
Curtis expects AMD to wrestle away market share from rival Intel (INTC 5.12%). AMD's high-performance and energy-efficient EPYC processors are particularly well suited for the massive data center industry. Intel is the current leader in the global server market, but it's been steadily losing ground to AMD in recent years.
CEO Lisa Su said AMD's new chips would help customers reduce the costs of their cloud-computing operations. In turn, Curtis thinks AMD can win more business from companies like Meta Platforms, particularly as the social media giant ramps up its metaverse-building investments later in 2023.
Moreover, Curtis believes Intel won't have a product that can compete effectively with AMD's chips until 2024 -- and potentially even as late as 2025. Intel has struggled with costly production delays that have allowed AMD to leapfrog its previously industry-leading processor technology.
Now what
Revenue in AMD's data center segment soared 45% year over year to $1.6 billion in the third quarter. Yet despite these impressive gains, AMD's share of the server chip market still stands at less than 25%, compared to roughly 70% for Intel. This leaves plenty of room for AMD to expand its booming data center business in the coming years.
