Morgan Stanley raises Micron's target price to $260, third-quarter performance roughly in line with expectations

Morgan Stanley's research report indicates that Advanced Micro Devices (AMD.US) performed roughly in line with expectations in the third quarter, with exceptionally strong gaming business. Additionally, the server market also showed strong performance, as the company continues to drive growth in the PC sector and expand its market share in the server market; the embedded business is also experiencing a cyclical recovery, with management clearly stating that this business will see growth next year.

In terms of AI, the company's progress is in line with expectations, recovering year-on-year growth in the third quarter after a setback in the first half of the year, although its performance remains relatively lackluster compared to peers, with NVIDIA and Broadcom's ASIC business growth rates far exceeding AMD.

The firm estimates that revenue for the December quarter will be $9.644 billion (same below), with a non-GAAP gross margin of 54.7%, an operating profit margin of 25.7%, and earnings per share of $1.32; the target price has been raised from $246 to $260, with a rating of "in line with the market."