AMD (NASDAQ: AMD) once again impressed investors with its strong quarterly revenue growth. Sales are picking up in its key, core, businesses. While valuations are unfavorable, the outlook justifies upside momentum for AMD traders.
AMD is in danger of stalling in the high $19 and $20 range but the steady roll-out of Ryzen 2 solutions and the release of Threadripper 2 will resonate with investors.
2990WX, or Threadripper 2nd generation, has 32-cores and 64 threads. At $1,799, the chip is a "steal" compared to Intel’s (NASDAQ: INTC) i9 solution. The CPU is not for the mainstream market but its customer base, who will buy this upgrade, will lift AMD’s reputation.
TR’s so powerful that video rendering and processing times will get cut by hours. This saves time for the end-user and ultimately justifies the upgrade.
Downside risks
Crypto’s downturn is ultimately slightly negative for AMD and NVidia (NASDAQ: NVDA), to a lesser degree. Sales of used crypto cards, if undisclosed of its use, could hurt GPU sales. For AMD, NVidia’s impending release cycle of Turing GPUs will put AMD behind.
Ryzen mobile, desktop and EPYC will offset the weakness in the GPU space but to justify a share price of over $21 - $25, AMD needs to step up its game in this segment.
