Intel’s (INTC) HEDT chip refresh will renew its challenge to AMD (NASDAQ:AMD) this week. Cascade Lake-X is long overdue and will give customers a choice over AMD’s Threadripper. Intel claims it will offer a better price to performance than AMD. Early reports suggest Intel will deliver on this.
The new chip will give a 1.74x-2.09x relative per-dollar performance improvement. AMD’s TR will give a 1.3x to 1.61x at best. But Intel is cutting prices of this chip to get there, which could have a negative impact on profit margins. AMD will not feel much pressure because HEDT chips target very specific communities. Those needing super-computing are in the minority. AMD has the Ryzen 7nm chip refresh to win over consumers.
In the medium term, Intel still has a bigger marketing budget to get consumers picking its chip over AMD. Still, AMD’s major supply deal with Microsoft (NASDAQ:MSFT) might change that. On Oct. 2, Microsoft announced a Surface Pro X powered by a Qualcomm (NASDAQ:QCOM) ARM chip. The bad news for Intel is that AMD will power the Surface Laptop 3. The 13-inch and 15-inch models will have either a Ryzen 5 or 7 chip.
Choosing AMD over Intel is a huge win of confidence for AMD. With limited advertising for Ryzen, consumers who notice Surfaces powered by AMD may choose an AMD solution for their upgrades.
Intel is still a cheap stock by P/E measures and will trade in a range. Continue buying the stock on the dip and selling it when the stock rallies.
