- Wells Fargo acknowledged Advanced Micro Devices Inc (NASDAQ:AMD) shares' underperformance and believes that its ongoing data center momentum should offset tempering PC expectations, creating a favorable risk/reward set-up in its upcoming earnings.
- AMD was down 38% YTD vs. S&P at -8% and PHLX Semiconductor Sector Index (SOX) at -22%.
- Wells Fargo was positive on AMD's ability to continue gaining share in the server and PC CPU markets, increasing traction in datacenter GPUs, positive / accelerating incremental operating leverage, and ultimately earnings power above $6/share by 2025.
- Wells Fargo reiterated Overweight and cut the price target to $140 (from $180) over macro concerns. The price target implies a 57% upside.
- With ongoing data center momentum, Xilinx acquisition synergies, and capital return, Wells Fargo saw AMD shares trade at a relative premium to the SOX.
- Price Action: AMD shares traded lower by 0.62% at $89.30 on the last check Friday.
