Jefferies analyst Mark Lipacis reiterated his buy rating on AMD's stock and boosted his target price from $86 to $95. Lipacis expects AMD to rapidly gain share in the coveted server market, due in part to Intel's (INTC 0.02%) struggles with its transition to new 7-nanometer chips. Lipacis predicts that Intel's delays will help AMD capture 30% of the server market within the next three years and as much as 50% within the next half-decade, up from about 10% today.
While Intel struggles to bring its new 7nm chips online, AMD is marching ahead. On Monday, AMD announced that its new 7nm AMD Radeon Pro 5000 series graphics processing units (GPUs) for Apple's updated 27-inch iMac were available for purchase.
AMD Vice President Scott Herkelman said the following in a press release:
The new AMD GPUs offer the optimal combination of compute performance, energy efficiency and outstanding graphics features to power a wide range of applications -- from consumer to pro -- wherever graphics matter the most.
When your competitors stumble, it's wise to press your advantage. AMD knows this, and it's making all the right moves to wrestle away market share from the once-mighty Intel. Investors, in turn, are growing more optimistic about AMD's growth prospects, and its stock price is rising in kind.
Moreover, if Lipacis is correct and AMD gains control of half the server market, shareholders could enjoy fortune-building gains in the coming years.