Forbes predicts bright future for AMD

Tarot readers and soothsayers working for Forbes are predicting that life for AMD will get much better for the fabless chipmaker.

Forbes is predicting that AMD’s share price will rise to $9.50, which is about 40 percent better than where it is sitting now,

Forbes thinks that AMD’s share in notebook processor market will increase by six percent over the next year. In the past it has fluctuated between 17 percent and 12 percent. But Forbes believes that AMD’s new Llano chips with “good graphics capability” integrated with the main chip, will do rather well.

Global notebook shipments have increased from about 62 million in 2005 to close to 160 million in 2010. Forbes said that growth will continue but will be a bit slower than many will like. HP is making a significant marketing push with new notebooks powered by AMD, which could help lift market share, Forbes said.

AMD’s share in server processor market has been falling lately from a peak of about 25 percent in 2006 to just seven percent in 2010. Forbes seems to expect some recovery.

AMD will suffer a bit from flat global desktop shipments but will make improved profit margins on desktop, notebooks and servers.

Tablets could prove a wild card in the figures. Forbes points out that this is a new area for AMD where it competes with entrenched rivals.

This is important because some of the uncertainty around AMD’s stock relates to how the notebook market will grow. If emerging markets can fuel notebook growth such that global shipments reach to 250 million by end of the forecast period, AMD could grow this sector by about five per cent.

What is surprising is that Forbes thinks that AMD will claw back eight percent of the server market which had been lost to Intel since the introduction of Xeon 5100 and AMD’s late arrival with its Barcelona chip in 2008.

Forbes thinks that AMD will bulldozer its way back into that market with processors will be better suited in cloud computing environments where CPU use is high.