Raymond James reiterates Outperform rating for Advanced Micro Devices, Inc. (NASDAQ:AMD)

The recent Raymond James Technology Investors Conference brought useful details to the fore about the plans and opportunities for Advanced Micro Devices, Inc. (NASDAQ:AMD). Based on the chipmaker’s pitch at the conference, Raymond James analysts feel more confident about their targets for the company. The analysts have reaffirmed their Outperform rating on the stock.

Among other areas, Raymond James sees Advanced Micro Devices, Inc. (NASDAQ:AMD)’s growth catalysts as being in data center and game consoles markets as the company gears up for new product releases for the segments. In the games segment, AMD is the supplier of GPU chips for Sony Corp (ADR) (NYSE:SNE)’s PlayStation 4 and Microsoft Corporation (NASDAQ:MSFT)’s Xbox One.

Data center

Advanced Micro Devices, Inc. (NASDAQ:AMD) is hoping to displace Intel Corporation (NASDAQ:INTC) chips in data centers and high-end desktops with its Zen project. Because many enterprises and data center operators have been seeking to get alternatives to Intel’s processors for servers/high-end computers, there already a market waiting for Zen.

AMD is expected to start Zen sampling in 2016 with volume production expected to start in 2017. According to AMD, Zen is one of its most important areas to watch in 2016 onwards.

 

Game consoles

Gaming is another area in which Advanced Micro Devices, Inc. (NASDAQ:AMD) is targeting more growth in the coming years. The company is particularly looking for unit expansion with Microsoft and Sony in the gaming console space in 2016.

AMD also continues to innovate to allow it gain more gaming sockets. For example, the company remains committed to next-generation semi-custom chips for the gaming console market, hoping for more socket wins in the back half of 2016.

With the console sockets that it has already gained, AMD expects to generate between $1.2 and $1.5 billion in revenues over cycle period of three years.

Manufacturing process

Advanced Micro Devices, Inc. (NASDAQ:AMD) is on track to transition to 14nm manufacturing process in 2016 at both TSMC and GlobalFoundries, its foundry partners.

Rating

Raymond James’ Outperform rating for Advanced Micro Devices, Inc. (NASDAQ:AMD) stands.

 

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