Intel Corporation (INTC), Advanced Micro Devices, Inc. (AMD): 50% Upside on This Semiconductor Giant

Taking these factors into account, the high end of 2014’s EPS estimates of $0.4 to $0.44 seems quite achievable. Using a P/E of 15x we can calculate a target price in the range of $6 to $6.6 for the end of next year.

Bottom Line

Advanced Micro Devices, Inc. (NYSE:AMD) has suffered in the last few years due to the dominance of Intel Corporation (NASDAQ:INTC) and failing fortunes of the PC. The Jaguar APUs and gaming consoles have finally given AMD a chance to turn around its fortunes. The Temash APU can seriously challenge Intel’s ambitions to dominate the handheld industry.

Sony and Microsoft Corporation (NASDAQ:MSFT) are launching their new gaming consoles this year. Both devices have AMD hardware and a large fan following. Microsoft might face some revenue shortfalls with Xbox because the company has imposed a lot of restrictions that are not consumer-friendly, making Sony PS4 the console of choice. AMD will benefit in either case and offers a significant upside to current valuations.

Mohsin Saeed has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Microsoft.

The article 50% Upside on This Semiconductor Giant originally appeared on Fool.com.

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