Cowen is more optimistic on AMD gains in the cloud computing market after a presentation from a company executive.

The firm raised its price target for AMD shares to $21 from $18, predicting the chipmaker will report better-than-expected profits in 2020.

"Along with recent announcements of new server deals with Cisco/Tencent and the crystallization of our 7nm [nanometer] AMD versus 10nm Intel thesis, we are increasingly confident in upside to AMD shares," analyst Matthew Ramsay said in a note to clients Thursday. "We believe consistent product execution across the PC, GPU, and server road maps can deliver the much higher gross [profit] margin targets (40-44% versus 37% today) and material upside to the $0.75 EPS target for 2020 outlined by management."

AMD shares were up slightly Friday morning. Its stock price is up 58 percent this year through Thursday.

Ramsay also reiterated his outperform rating for AMD shares.

The analyst noted comments Thursday by AMD's head of data center and embedded solutions, Forrest Norrod, that five of the top seven cloud computing providers are now working with the company.

"Mr. Norrod largely echoed our thesis that AMD's shift to 7nm will place the company on process node parity with Intel at 10nm silicon, a dynamic not seen in over a decade," Ramsay said. "Given industry checks and management commentary have confirmed technological equivalency, we believe this positions AMD to more effectively compete against Intel across PC and server CPUs."

Intel revealed on its April 26 earnings conference call that it delayed volume production under its 10-nanometer chip manufacturing process to next year. Conversely, AMD said on its call that it plans to start next-generation 7-nanometer chip production in late 2018.

One nanometer equals one-billionth of a meter. Smaller nanometer chipmaking technologies allow companies to create faster, more power-efficient chips.

"Over the past month, we've come away with a more entrenched and bullish view of AMD's execution and potential share gains in PC/server CPUs," Ramsay said.