Advanced Micro Devices Stock Hits 2019 Highs on Morgan Stanley Upgrade

The brokerage firm expects AMD to announce another big partnership at E3

by Emma Duncan

Published on Jun 6, 2019 at 9:50 AM

Tech giant Advanced Micro Devices, Inc. (NASDAQ:AMD) is back in headlines this morning, still receiving praise from its Monday announcement that it has partnered up with Samsung Electronics. Morgan Stanley this morning upgraded AMD to "equal weight" from "underweight," and hiked its price target to $28 from $17. The firm said it expects the chip concern to reveal a partnership with Microsoft (MSFT) at the Electronic Entertainment Expo (E3) next week, and that its Samsung deal alongside cloud gaming will bring "hundreds of millions" in revenue. So far this morning, AMD has added 2.3% to trade at $30.18.

Advanced Micro Devices stock has been in a channel of higher highs and lows in 2019, up nearly 60% year-to-date. More recently, the shares have seen support at the 60-day moving average, and today they're on pace for their highest close of the year.

Morgan Stanley's revised outlook is not too far from the stock's average 12-month price target of $29.97 -- now a discount to the equity's price. More upgrades could be on the horizon, as nearly half of covering analysts still sport a tepid "hold" or worse recommendation on AMD.

Meanwhile, now looks to be an attractive time to be purchasing premium on short-term AMD options. The security's Schaeffer's Volatility Index (SVI) of 54% ranks in the 24th annual percentile, indicating near-term contracts are pricing in relatively low volatility expectations at the moment.

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