AMD surges after Jefferies sees a 'foundational shift' versus the competition (AMD)

• AMD shares gained more than 8% Tuesday after receiving an upgrade from Jefferies.

• The firm's analyst says AMD is handily beating Intel when it comes to microprocessors and has gained market share in notebooks. 

• Follow AMD's stock price in real-time here. 

Shares of AMD rose more than 8% Tuesday after Jefferies sent out a bullish note following its analysts' meeting with company management.

"We have higher conviction that in 2H19, AMD will ship a server MPU with higher transistor density than INTC for the first time in recent history, if not ever," analyst Mark Lipacis said in a notes sent to clients on Tuesday. "We see this as a foundational shift in competitive dynamics. Meanwhile, our checks also suggest that AMD continues to take share in high-end notebooks."

For years, AMD trailed Intel, Jefferies says. But the semiconductor maker has easily regained market share as the older competitor struggles to produce 10-nanometer chips. Intel has delayed its rollout of these smaller, next generation chips until at least 2019 while AMD is gearing up to launch its even smaller 7-nanometer processor next year.

Jefferies expects that 7-nanometer chip to ship in the second half of 2019. "By that time," the firm says, "we expect Intel's most advanced server MPU (microprocessor) will be based on its 14nm (or 14nm++) manufacturing technology, which we consider to be a full generation behind AMD's 7nm."

And Jefferies' exuberance goes beyond chips. The firm also cites a gain in laptop market share for its price target increase from $22 to $30.

"Our own checks indicate that AMD gained traction in part because of the delay of Intel's low power Amber Lake (14nm+) MPUs," the firm said. "Intel launched Amber Lake and Whiskey Lake last week - although it is not clear if they offer material improvement over their previous MPUs."

Shares of AMD have gained 142% this year.

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