The graphic card release from Advanced Micro Devices (NASDAQ:AMD) has a good chance of lifting sales in the coming quarters. On Oct. 28, AMD launched the RX 6000, a much-needed product that will help it take on Nvidia (NASDAQ:NVDA).
RX 6000, or Big Navi, will cost between $579 and $999. It will help AMD catch up to Nvidia, whose Ampere-based GeForce RTX 3000 GPUs came out first a few months before. The GPU is built on the RDNA 2 gaming architecture. As gamers upgrade to 4K and 1440p systems to play AAA titles, AMD GPU sales will perform well during the holiday season.
Before the launch, investors did not expect that AMD would close the performance gap with Nvidia. Plus, a computer paired with the Radeon GPU with a 7nm Ryzen on a laptop will consume less power than the Intel (NASDAQ:INTC) and Nvidia combination. Intel’s 14nm CPU and the 8nm Ampere is less attractive. If game review sites give high scores to AMD, then expect Nvidia to lose market share in the coming quarters.
Intel and Nvidia may respond by lowering prices. This would cut profit margins and pressure AMD to lower prices, too. By the time unit sales rise, AMD will benefit from economies of scale and will not face lower margins.
