Since reporting strong quarterly earnings, Advanced Micro Devices (NASDAQ: AMD) is set to hold the $12 share level as trading volume keeps pace with historical averages. The difference this time is that the stock rose every single trading session since the results. Not all stock traders are pleased: short float is topping 20 percent, setting the stage for a short-squeeze.
Arguing the bearish case for AMD is easy: cast doubt in its desktop growth prospects, graphics card demand, or server sales and nervous holders get shaken out. But Ryzen 2 is causing a positive stir on the PC enthusiast forums. For the first time in nearly a decade, Intel (NASDAQ: INTC) has a competitor in the CPU space for desktop, mobile, and server, the latter through EPYC.
Even if AMD takes market share from Intel, which is tough because the Coffee Lake i7 chips are strong performers, Intel could do better by adapting more AMD Vega GPUs for its integrated CPUs. AMD would get the much-needed cash flow to grow. Intel gets a full end-to-end budget chip without getting held back by its "HD-series" iGPU.
EPYC is a scalable monster that could take on Intel but the market growth for the new chip is in the early innings. Besides, Intel’s business is shifting towards computing in cars, AI, super-computers. Data Centers and systems that power Facebook (NASDAQ: FB) or other data-intensive sites still make plenty of money for Intel.
Disclosure: Author owns shares of AMD.
