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Today sees dueling chip-stock reports, with bullishs view from both Rosenblatt Securities's Hans Mosesmann, and MKMPartners's Ruben Roy, although the two differ sharply in how they view Intel (INTC), Nvidia (NVDA) and Advanced Micro Devices (AMD).

Mosesmann is negative on Intel's prospects and positive on Nvidia and AMD; Roy takes the opposite view.

Intel shares today are down 48 cents, or 1.3%, at $36.05, Nvidia is down 41 cents, or 0.4%, at $110.52, and AMD is up 23 cents, or 1.7%, at $14.23.

On Intel, Roy writes that the company "recently outlined a longer-term strategy at its annual Analyst Meeting and highlighted the emerging path that the company plans to take to benefit from innovation around data and data analytics."

"While the PC market remains the largest contributor of INTC revenue, we think that a decelerating rate of decline in the PC market this year and continued profitability improvements for the segment allow INTC to more aggressively invest into growth markets."

He’s bullish on the company’s data center business, even if it’s slowed of late:

INTC expects high single-digit growth for DCG in 2017 followed by a CAGR in the low double-digit range through 2021. While DCG remains the most profitable segment for INTC, with operating margin of 45% in 2016, this was down from 49% for the segment in 2015 and management revised its operating margin guidance for DCG to 40%-45% from 45%-50% citing product mix, start-up costs on new manufacturing technologies, and increased allocation of corporate expenses to the group. We think the increased investments, as well as a focus on transitioning the DCG product families to new generation process technologies on a rapid basis (first segment slated for 7nm products), will equate to stronger longer-term top-line growth. We expect INTC’s work on connectivity products (Omni-Path) and new memory systems (Optane) to provide additional competitive advantages to the company.

Mosesmann starts Intel with a Sell rating, writing that there are "structural changes” in the x86 chip market, moving to “a more ‘data' centric world (better suited for GPUs and accelerators),” and that this represents "a secular headwind for x86 server CPUs, a market in which Intel is likely to lose market share after years of near 100% share."

Intel as a “Data” company – Intel management’s recent revelation that it’s now a data company clearly shows that they understand the challenges ahead. It is now well known that next generation compute, and in particular in datacenters, is a “data” processing centric dynamic, rather than the historical “instruction” processing centric dynamic in which CPUs (Intel’s expertise). For better or for worse, Intel the incumbent is faced with a new market ahead.

Intel has developed a number of “accelerator” platforms, such as its “XEON Phi,” but "The problem in our mind is that these kinds of accelerators/workloads are niche and/or lack the scale of GPUs in terms of overall volumes (driven by gaming)."

As regards Nvidia, to which MKM’s Roy assigns a Neutral rating and a $100 price target, Roy “loves” the “story,” he writes, but he’s reluctant to recommend because of the prospect AMD will take share in graphics chips, and because of valuation:

NVDA shares are currently trading at 33x our calendar fiscal 2019 (calendar 2018) EPS estimate of $3.28, a material premium to the peer group average of 18x. While one could argue that NVDA’s positioning in multiple multi-billion dollar growth markets should warrant a hefty premium to its peer group, execution risk at such a lofty level is a concern. With this in mind, we think a fair value estimate of $100, or 30x our C2018 EPS estimate, is appropriate.

Mosesmann, starting Nvidia stock at Buy, with a $140 price target, writes that "We see no other semiconductor company with the multi-billion dollar green field opportunities (AI, self-driving cars, etc.), combined with the compa- ny’s unique set of scalable core IP/Software/technologies in GPU, deep neural network compute, artificial intelligence, autonomous driving."

For AMD, Roy assigns a Neutral rating as well, and a $13 price target, writing that the new “Zen” chips that are starting to ship now “could be an inflection point” for the company, but that he’s still reluctant to recommend given valuation:

While AMD shares are trading at a meaningful discount to its peer group at 2.6x EV-to-2018 sales versus the peer group average of 3.8x, we would note that its shares have historically traded at a discount to the group, peaking at an EV/S multiple of approximately 3.0x in 2006 and averaging roughly 2.0x EV to forward sales in growth periods over the past 20 years. There is a lot to like about AMD’s resurgence but, for now, we think much of the company’s improved execution over the past five years is reflected in the share price. Our fair value estimate of $13 is based on a 2.5x EV/S multiple on our 2018 estimate.

Mosesmann starts AMD at Buy, with a $16.50 price target, writing that the same switch to data-centric processing that threatens Intel is a boon to AMD:

The “instruction” processing centric CPU is being threatened by the “data” processing centric GPU which structurally advantages AMD as the #2 player in GPUs with the company’s new Vega architecture.More importantly for the shares is the re-emergence of AMD in mainstream and high-end x86 CPUs particularly in servers given Intel’s (INTC: Sell) near 100% share. AMD’s new Zen family of processors (architected by highly acclaimed CPU ar- chitect Jim Keller), is set to gain share in mid-to-high end server sockets as datacenter players are keen on an alternative source that likely will not sell them “up” every year, and with features that Intel may not offer such as 8 memory channels (DRAM).

In addition to Intel, Roy likes Cavium (CAVM), Broadcom (BRCM), Cirrus Logic (CRUS), Micron Technology (MU), Qorvo (QRVO) and Skyworks Solutions (SWKS).

Mosesmann likes Microchip (MCHP), Texas Instruments (TXN), Inphi (IPHI), and Micron; he’s Neutral on Xilinx (XLNX), Mellanox (MLNX), and Cavium.