Wall Street analysts gushed about AMD's fourth-generation Epyc server processors, saying the new chips will help it gain market share in data centers. AMD stock rose on Friday.
The Santa Clara, Calif.-based company announced the chips at an event Thursday. AMD said its new server processors offer up to 2.8 times more performance and use up to 54% less power compared with the competition.
Rosenblatt Securities analyst Hans Mosesmann called the Epyc 4, code-named Genoa, a "monster" in a report titled "The data center will never be the same."
The new processor cements AMD's data center leadership "on virtually all metrics," Mosesmann said. Those metrics include performance, energy efficiency and total cost of ownership.
AMD Stock Climbs After Chip Debut
On the stock market today, AMD stock rose 5.7% to 72.37. On Thursday, AMD stock popped 14.3% higher amid a broad market rally.
"We see AMD accelerating its leadership in x86 data center CPUs (central processing units) with Genoa," Mosesmann said. "AMD made the case that Genoa can match current Intel Xeons with 67% fewer CPUs at over 50% less power."
Meanwhile, Intel's two-year delayed Sapphire Rapids processor is currently expected to launch in early 2023. That Intel chip was meant to do battle with Epyc 3 processors, Mosesmann said. He rates AMD stock as buy and Intel stock as sell.
AMD's New Chip Is Like Domino's Pizza
"Genoa should have been named 'Domino's,' because it delivers," Wedbush Securities analyst Matt Bryson said in a note to clients. He rates AMD stock as outperform with a 12-month price target of 100.
"Given the struggles that Intel's had with its Sapphire Rapids platform, AMD arguably could have mailed it in with their 4th generation Epyc platform and still maintained a strong competitive position," Bryson said. "However, rather, it appears that AMD delivered significant upgrades both in performance and features vs. Milan (Epyc 3)."
Contract chipmaker Taiwan Semiconductor Manufacturing will make the fourth-generation Epyc server chips with 5-nanometer scale technology.
Impressive Customer Support
BMO Capital Markets analyst Ambrish Srivastava said the lineup of customers at AMD's launch event was impressive. They included Alphabet's Google Cloud, Dell Technologies, Hewlett Packard Enterprise, Lenovo, Microsoft Azure, Oracle and Supermicro.
"Overall, we are very positive on AMD's ability to continue to take share in the data center market," Srivastava said in a note.
AMD stock ranks No. 14 out of 34 stocks in IBD's fabless chipmaker industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 46 out of 99.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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