AMD Stock Flies Higher After Upgrade from Morgan Stanley

Shares of AMD were moving higher after Morgan Stanley lifted its negative call on the company.

The American multinational semiconductor company received an upgrade from Morgan Stanley analyst Joseph Moore who long doubted the company.

Moore called it an ‘obviously’ wrong bearish call, and said that the coming E3 gaming conference is a possible positive catalyst for the stock.

Shares were up over 5% as Wall Street digested the upgrade from “underweight” to “equal-weight.”

It was in late 2017 that Moore had set an underperform rating on the stock but since then, shares have exploded over 165%.

“While our earnings concerns over the last 12 months have played out and 2H numbers still look high, the table is set well for 2020 and there are positive near-term catalysts,” Moore wrote.

He added, “We still think there is too much short-term optimism, but we struggle with catalysts to remain underweight, especially into E3.”

The E3 is a major gaming conference that is set to take place next week.

Moore believes that the company will announce a partnership with Microsoft Corp. during the event.

“The bottom line is that due to a combination of the way that AMD implements virtualization, Nvidia’s NVDA, +1.77% desire to pursue higher-margin GeForce Now-based implementations, and AMD’s relationships with console developers, AMD can be in a very strong position to benefit if these cloud-based gaming initiatives start to take off,” Moore said.

“With Intel’s INTC, +1.23% comeback at best deferred and Nvidia’s heavy investment in ray tracing that will have a longer-term payoff,” AMD could be on a path to “sustained profits,” the analyst also remarked.

Moore also raised his price target to $28 from $17.

Shares of AMD are up about 69% this year so far.

Disclaimer: We have no position in Advanced Micro Devices, Inc. (NASDAQ: AMD) and have not been compensated for this article.