- AMD presents a risk to Nvidia (NVDA -2.1%) as it's made "substantial progress" and may have taken graphic chip share, says Wells Fargo's David Wong.
- "We believe that market share gains in graphics chips have been a contributor to Nvidia’s top line performance and stock price value over the last two years" -- a period where Nvidia stock has nearly doubled.
- But AMD's last quarterly report showed double-digit sequential growth in desktop discrete graphics units and gains in professional graphics, and guided for 15% sequential growth in the out quarter, while Nvidia's guidance midpoint implies a 10% sequential decline.
- A seasonal decline isn't a negative for Nvidia, Wong says, but "we think that Nvidia’s expectations and AMD’s graphics growth momentum suggest that AMD is beginning to regain graphics revenue share" and that Nvidia earnings this afternoon and Mercury Research's upcoming chip market update should confirm that.
- Wong has an Outperform rating on AMD (AMD -2.2%) and a price target of $4.00-$4.50 -- implying 12-26% upside. He's rating Nvidia Market Perform.
- Now read Nvidia And The Need For Speed »
Wells Fargo: AMD may be taking share from Nvidia
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