Late last week, Advanced Micro Devices (NASDAQ:AMD) finally crossed the $41 barrier. Trade deal hopes lifted the stock market and took AMD stock with it. But AMD is not out of the woods. The stock reflects the most optimistic case and relies on Intel (NASDAQ:INTC) giving up market share. That is happening, albeit slowly.
Sentiment and interest over AMD’s latest Zen CPUs will lift revenues but Intel still dominates in the OEM market. Only Dell and HP Inc. (NYSE:HPQ) are starting to offer a decent system builds powered by AMD. Yet AMD needs PC systems listed alongside Intel-powered ones. It needs better store placement online and in the stores at Best Buy (NYSE:BBY). Until that happens, AMD’s revenue growth will not meet investor expectations.
AMD will still report good chip sales through the holiday season. But it could be better. In the server space, AMD EPYC chips are vastly better than Intel solutions. And since enterprise sales traditionally have better profit margins, the CPU refresh should accelerate AMD’s revenue growth. The 7nm chips now have 7 percent market share.
Rome is the code name for the EPYC second-generation chip release. AMD continues to work with suppliers and software developers to ensure the ecosystem refresh.
The notebook market is still as important as ever. AMD’s 7nm is coming up soon. Expect strong holiday notebook sales helping AMD’s revenue in the quarter. The bottom line is that with AMD breaking above the $41 level, the stock faces little resistance in the near-term.
Tech Insider
