What happened
After three days of uninterrupted selling, shares of semiconductor stalwart Advanced Micro Devices (AMD +1.98%) soared on Tuesday -- up 6.1% as of 2:15 p.m. ET.
Cowen & Co. is at least partly responsible for that.
Image source: Getty Images.
So what
In a press release Tuesday morning, AMD announced that it is launching sales of its new "ultimate gaming processor," the AMD Ryzen 7 5800X3D, a chip the company says delivers "up to 15% more gaming performance with ground-breaking AMD V-Cache technology." For just $449, it can be yours when sales commence on April 20.
AMD also announced a series of new Ryzen 7, 5, and 3 desktop processors at prices ranging from $99 to $299. What really may be exciting investors, however, in addition to all the new product announcements, is the fact that investment bank Cowen & Co. apparently just named AMD as one of its top picks in semiconductor stocks.
Now what
The accolade came in a curious form, though.
The big news in semiconductors Tuesday, after all, was Cowen's recommendation of AMD's larger competitor, Nvidia (NVDA +2.11%), which Cowen named a "top pick" in the industry based on projections the company could earn $28 a share in 2030, and book $140 billion in revenues. But as StreetInsider.com pointed out, Cowen's report actually noted that "we make NVIDIA our new top pick, along with AMD" (emphasis added).
Cowen didn't go into detail Tuesday about why it likes AMD as much as Nvidia, but back in January, the analyst predicted "continued PC and server share gains" for AMD and called the company "one of the best organic growth stories in semis."
In February, that analyst raised his target price for AMD stock to $160. However, AMD stock is now down by about 12% since that February call, and trading at around two-thirds of the analyst's target price. That implies a 47% potential profit for this Cowen "top pick" over the next 12 months.
No wonder some investors are excited.
