Advanced Micro Devices’s AMD chief executive officer (CEO) and president Dr. Lisa Su during a ‘keynote presentation’ in the CES 2019 spoke about the company’s initiatives in computing, gaming and visualization technologies through product rollouts.
AMD launched the much-awaited next generation 7-nanometer (nm) Radeon Vega GPU, AMD Radeon VII. This launch is likely to provide AMD an edge against the likes of NVIDIA NVDA and Intel INTC.
This card is ideal for gamers who require superior graphic performance. Powered by the latest second-generation AMD ‘Vega’ architecture, the graphics card will support AAA, eSports and Virtual Reality (VR) titles, giving it the desired speed for optimal graphics solutions required for notebooks and desktops. The card has been designed to deliver more than 29% of computing performance, offering extreme gaming details with 2X superior brightness and color volume.
Priced at $699, Radeon VIIsupports AMD Radeon FreeSync 2HDR technology, offering an improved soundscape for gaming along with rich graphics. AMD has raised the bar for gaming with its Radeon VII graphics card and intends to offer gamers with free PC versions of Resident Evil 2, Devil May Cry 5 and Tom Clancy’s The Division 2.
With these cards, AMD is foraying into the high-end graphics card market. Consequently, AMD’s revenues are poised to benefit significantly if the latest GPU can cater to the rising demand of the users.
AMD stock has returned 66.3% year over year, against the industry’s decline of 10.3%.
Enhanced Features of AMD Radeon VII
Per company’s laboratory tests, the new processor offers approximately 35% faster multi-thread performance in Battlefield V and up to 42% more performance in Strange Brigad when compared with the previous version of AMD Radeon RX Vega 64 graphics card. Further, the new processor delivers almost 62% more performance in the OpenCL LuxMark compute benchmark over the previous version.
The new AMD Ryzen Threadripper CPUs are loaded with robust technologies to enhance experience of the end user. These enhanced features compelled notable game developers and partners to select AMD Radeon VII graphics card.
To mention few, the Alienware Area 51 second Generation Threadripper Edition will now be powered by AMD Radeon VII graphics cards along with second Generation AMD Ryzen Threadripper processors. Going forward, the e-sports gaming team, Fnatic will apply AMD Radeon VII graphics cards in its high-performance PC gaming. In addition, Ubisoft intends to use AMD Radeon technologies in its forthcoming AAA blockbuster, Tom Clancy's The Division 2.
Gaming PC & GPU Demand to Boost AMD’s Growth
Per Gartner, PC shipments in the third quarter increased 0.1% year over year to 67.2 million units. We believe AMD is well poised to benefit from the strong demand of gaming PCs.
Notably, growth in the gaming hardware market is driving demand for graphics processors as well. Per Allied Market Research, the GPU market is anticipated to reach $157.1 billion by 2022 at a CAGR of 35.6% from 2016 to 2022.
Furthermore, increasing adoption of AI techniques and machine learning tools in industries like gaming, automotive and blockchain are primarily responsible for driving GPU demand. AMD is benefiting from this demand.
We believe that the launch of the new graphics card will help AMD increase its market share further.
Zacks Rank & Key Pick
AMD currently has a Zacks Rank #3 (Buy).
A better-ranked stock in the broader technology sector is Marvell Technology Group Ltd. MRVL, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Marvell Technology is projected to be 9.4%.
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