Advanced Micro Devices (AMD) spent the last few months trading in a tight range of $52 - $55. Conversely, Nvidia (NVDA) rose from a $200 low in mid-March to over $400. Still, Intel (INTC) is also stuck in a $60 trading range. What will it take for AMD to break out to new highs?
AMD does not have the GPU cloud computing solution that Nvidia offers. But its growing lead in the centralized CPU market justifies its premium valuation. EPYC offers better pricing and performance than Intel’s Xeon solution. In the high-performance arena, AMD’s ThreadRipper is now in its third generation. The 3970X is the world’s first 64-core desktop. Intel is trying to catch up with its graphics chip and software for high-performance computing and AI. Yet AMD has a sizable lead, limiting the competitive pressures ahead.
Two Catalysts Ahead
Strong PC sales due to the lockdown will help lift AMD’s CPU sales. AMD has had around 20% of the PC market in the first quarter. As it rolls out the fourth-generation Ryzen desktop processor in the second half of the year, AMD’s market share should grow.
Gaming will get a lift in two fronts. PC gaming is still hot and will help AMD’s Radeon GPU sales. And Sony and Microsoft are refreshing consoles. Powered by AMD chips, initial console sales should add cash flow for AMD.
