Wall Street analysts raved AMD‘s (AMD) 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 on Thursday. AMD said its new server processors deliver up to 2.8 times more performance and use up to 54% less power than the competition.
Rosenblatt Securities analyst Hans Mosesmann called the Epyc 4, codenamed 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 every metric,” Mosesmann said. These metrics include performance, energy efficiency, and total cost of ownership.
AMD Stock Climbs After Chip Launch
In trading today, AMD stock rose 5.7% to 72.37. On Thursday, AMD stock jumped 14.3% amid a broad market rally.
“We see AMD accelerating its leadership in x86 data center processors (central processing units) with Genoa,” Mosesmann said. “AMD has argued that Genoa can match current Intel Xeon processors with 67% fewer processors and over 50% less power.”
Meanwhile, IntelThe two-year-delayed Sapphire Rapids processor from (INTC) is currently slated for launch in early 2023. This Intel chip was meant to battle Epyc 3 processors, Mosesmann said. It rates AMD stocks as buys and Intel stocks as sells.
AMD’s new chip is like Domino’s Pizza
“Genoa should have been called ‘Domino’s,’ because it delivers what it promises,” Wedbush Securities analyst Matt Bryson said in a note to clients. He believes AMD stock is outperforming with a 12-month price target of 100.
“Given Intel’s struggles with its Sapphire Rapids platform, AMD could arguably have mailed it with its 4th Gen Epyc platform and still maintain a strong competitive position,” Bryson said. “However, it looks rather like AMD has provided significant upgrades both in terms of performance and functionality over Milan (Epyc 3).”
Contract chipmaker Semiconductor manufacturing in Taiwan (TSM) will manufacture the fourth-generation Epyc server chips with 5-nanometer scale technology.
Impressive customer support
BMO Capital Markets analyst Ambrish Srivastava said the customer list at AMD’s launch event was impressive. They included Alphabetof (GOOGL) Google Cloud, Dell Technologies (OF THE), Hewlett Packard Enterprise (HPE), Lenovo, Microsoft (MSFT) Azure, Oracle (ORCL) and Supermicro (SMCI).
“Overall, we are very positive about AMD’s ability to continue to take market share in the data center market,” Srivastava said in a note.
AMD stock ranks 14th out of 34 stocks in IBD’s fabless chipmaker industry group, according to IBD Stock Checkup. It has an IBD composite rating of less than 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 higher.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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