10% Upside to AMD from Higher Expected Desktop Processor Pricing, Share
AMD (NYSE:AMD) competes withIntel (NASDAQ:INTC) and nVIDIA (NASDAQ:NVDA) in the PC processor market. We currently have a Trefis price estimate of around $10 for AMD’s stock, about 32% above the current market price of $7.50.
Trefis members have created forecasts for two key drivers of AMD’s stock over the last week: (1) Desktop Processor Pricing and (2) Desktop Processor Market Share. The member forecasts suggest AMD’s Desktop Processor Pricing and Desktop Processor Market Share will trend above the Trefis forecast. These projections suggest a combined upside of around 10% for AMD’s stock.
We estimate that Desktop Processors account for around 16% of the $10 Trefis price estimate for AMD’s stock. Hence the stock is quite sensitive to (1) Desktop Processor Pricing and (2) Desktop Processor Market Share. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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The average of forecasts for Desktop Processor Pricing created by Trefis members indicated a projected increase from around $47 in 2010 to $49 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from around $43 in 2010 to $34.50 by the end of the Trefis forecast period. The member estimates imply an upside of 8% to the Trefis price estimate for AMD’s stock. In the past, Desktop Processor Pricing has decreased from $81.50 in 2003 to around $44 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of AMD’s stock to Desktop Processor Pricing.
Our complete analysis for Desktop Processor Pricing is here.
2. Desktop Processor Market Share
The average of forecasts for Desktop Processor Market Share created by Trefis members indicated a projected increase from around 27% in 2010 to around 28% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from around 27% in 2010 to around 25% by the end of the Trefis forecast period. The member estimates imply an upside of 2% to the Trefis price estimate for AMD’s stock. In the past, Desktop Processor Market Share has increased from around 21% in 2003 to around 27% in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of AMD’s stock to Desktop Processor Market Share.