Advanced Micro Devices Inc. (NASDAQ: AMD) has had a very hard time finding love from investors. After all, the company just keeps disappointing, and analysts who have been positive have generally regretted that stance. Some investors have even begun to fear that the worst case for AMD could unfold in the coming year or two.

While many analysts were negative ahead of AMD’s analyst day, and most have remained cautious or negative afterward, Wells Fargo has remained positive on AMD with an Outperform rating. The firm has even maintained its fair value target range of $3.00 to $3.50 on AMD’s stock.

24/7 Wall St. wanted to review what Wells Fargo had to say. The aim is to see if this might offer a positive outlook for investors who are looking and hoping for any bit of good news here. In an effort to maintain balance, we have included a quick montage of cautious and negative calls at the end of this article.

Wells Fargo’s David Wong said that AMD’s analyst day left him with a clear and decisive strategy that the company is on. Wong said:

AMD’s analyst day presentations were, in our view, particularly helpful in defining a clear vision of how AMD will streamline its activities and focus on key technologies and market segments in its drive to future profitability. The company plans to reduce low-end PC exposure and re-enter the x86 server market. … AMD has clearly laid out a realistic strategy which makes good use of the company’s core strengths and expertise. We continue to think that over time AMD will be able to drive itself towards breakeven and then consistent profitability, creating significant value in its stock … we think the company has valuable expertise in microprocessor and graphics circuit design.

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Specific plans include the following:

• AMD plans to reduce its low-end PC exposure and to make focused ARM investments and implement a simplified road map.
• AMD appears to be transitioning its business from supporting two distinct x86 processor families at any given time to supporting a single family.
• AMD plans to reenter the x86 server market and on its 2016/2017 road map showed a next-generation Opteron server chip that is based on its next generation x86 Zen processor core.
• In the second half of 2015, AMD expects to achieve profitability and positive free cash flow, as well as to increase its gross cash balance.

Wong further said:

We think AMD’s decision to reduce low-end PC exposure has allowed the company to free up resources to provide the necessary investment in higher end processors that enables the effort to re-enter the x86 server processor market. Although AMD does show ARM-based server processors on its 2015 and 2016 roadmaps, we believe that the company correctly views the revenue prospects for standard ARM server processors to be at best modest. … AMD’s 2H2015 guidance implies potential upside to our estimates. AMD presented a long-term model indicating an expectation of operating margin in excess of 10% and earnings per share of greater than $0.50; we think these are reasonable expectations.

Wong’s valuation range of $3.00 to $3.50 is based on approximately 0.5 to 0.6 times Wells Fargo’s 2016 sales estimate, and the firm thinks the valuation is reasonable given a pattern of continuing losses.

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Still, Wong sees significant risks despite his positive upside targets. Company-specific risks include the fact that AMD has yet to clearly demonstrate an ability to stabilize its sales and reduce its losses. Sector risks include uncertainty as to what long-term secular growth might be.

More of the specific commentary from other analysts has also been provided.

The consensus analyst price target for the stock is now roughly $2.50. Here are some snapshots of what other analysts had to say after AMD’s analyst day:

• FBR Capital reiterated its Market Perform rating and maintained its $3.50 price target.
• Credit Suisse maintained its Underperform rating with a $2 price target (see below).
• Canaccord Genuity maintained its Hold rating, but raised its price target to $2.25 from $2.00.
• Oppenheimer has maintained its Underperform rating and has no formal price target (see below).

Credit Suisse’s John Pitzer has an Underperform rating and $2.00 price target. His note showed the following commentary about AMD’s long-term strategy, its product road map and long-term financial model:

Relative to near-term, AMD reiterated second quarter guidance from 2+ weeks ago, and also provided second half of 2015 guidance for the first time – specifically guiding second half revenues to increase 15% half-over-half and earnings per share to be better than break-even versus Street at +9% and (-$0.06), respectively.

Relative to the long-term strategy, AMD stressed profitable share and will continue to focus on diversifying revenue towards EESC from 40% today to a target of approximately 60% by focusing on three key opportunities: (1) Gaming, (2) Immersive Platforms and (3) Data Center.

Within PCs AMD will shift its focus to the higher end of the stack, and forgo the less profitable lower end consumer market. AMD also reiterated their strategy to avoid Tablets and Smartphones. The key enabler of AMD’s strategy will be a product roadmap which includes a new micro-architecture core code name “Zen” due out in 2016 which promises 40% more “instructions per clock” even before incorporating expected performance improvements as the Company’s first FinFET device …

While the Analyst Day clearly provided more detail on what appears to be a reasonable strategy, we continue to be concerned that AMD is rapidly losing scale in what is clearly a scale-driven business. Specifically, AMD has an R&D budget of about $1 billion versus Intel’s $11.5 billion in 2015, is highly dependent on variables outside of their control – namely 3rd party manufacturing IP – and does not provide compelling and differentiated enough performance attributes (while Zen is a significant improvement for AMD it still falls short of INTC’s roadmap) to ignite share gains in the core PC market or meaningful increase of footprint in new markets segments. While AMD remains an IP rich company, it is unclear that monetizing the IP as a standalone company is an easy to execute strategy.

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Oppenheimer’s Rick Schafer has an Underperform rating and no specific price target. He said:

We attended AMD’s analyst day Wednesday in New York. Management outlined the company’s return path to profitability and streamlined go-to-market strategy. While underwhelming PC demand/excess channel inventory compounds share loss to Intel in its core PC/graphics segment, management believes it can weather the storm thanks to some hefty cost cuts over the last two years.

Management outlined its long-term financial model, targeting modest top-line growth, gross margins of 36% to 40%, and operating expenses in the 26% to 30% range. We remain skeptical, but acknowledge the 36% reduction in operating expenses since the first quarter of 2012. CEO Lisa Su and her team spent a fair amount of time discussing a more unified approach to architecture, with more focused investments in areas where AMD can best leverage its intellectual property. We commend AMD management’s lasting efforts to right the ship, but believe the story remains firmly anchored in ‘prove-it’ mode. With new semi-custom design wins unlikely to ramp before the second half of 2016, we continue to see little to no earnings power and maintain our Underperform rating.

AMD searched for direction out of the chute on Thursday and was flat at $2.29 after about 20 minutes of trading, against a 52-week range of $2.14 to $4.80.

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