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AMD Commences 2019 With Latest Ryzen Processors and GPUs

Zacks Equity Research

Advanced Micro Devices AMD commenced the year with another round of display of its latest Ryzen Processors andRadeon graphics cardsat CES 2019. Notably, CES is an annual technology tradeshow conducted by the Consumer Technology Association every year in January in Las Vegas.

The company announced availability of the much-awaited second generation AMD Ryzen 3000 series mobile processorsfeaturing 12nm technology for ultrathin laptops and notebooks from first-quarter 2019.

The company also announced that AMD Athlon 300 series mobile processors, which are developed on Zen 3 core architecture, will made available fromearly 2019.

The latest chip flaunts various consumers’ choices, making it budget friendly. AMD Ryzen 3000 series and Athlon 300 series features higher core count which is anticipated to bolster the competitive position of AMD against Intel INTC.

The company also announced 8th GenAMD A-Series processors tailor-made for Chromebooks.

The new A6-9220C and A4-9120C processor features 2.7/1.8 GHz and 2.4/1.6 GHz base frequency, respectively. The latest series offers almost 3.2X faster connectivity and up to 74% more office application productivityas compared with the Intel Pentium N4200 and Celeron N3350, respectively.

Notably, both A-Series processors offer longer battery to keep pace with the consumer’s needs.

Additionally, AMD unveiled its new Radeon Software Adrenalin 2019 Edition. This updated version will feature the WattMan technology and be based on the AMD RadeonGraphics Processing Units (GPUs). This card is ideal for gamers who require superior graphic performance and high-quality visual experiences.

The company’s move to ramp up its CPU & GPU portfolio, reinforces its competitive position against the likes of NVIDIA NVDA. Following the news, shares of AMD were up almost 11%, yesterday. AMD stock has returned 54.7% year over year against the industry’s decline of 14.3%.

Gaming PC, GPU Demand & Chromebooks Gaining Traction

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.

Per a Market Research Future report, global 2 in 1 laptop market is anticipated to witness a CAGR of 20% from 2017 to reach approximately $3.4 billion by 2023.

Per Global Market Insights, Chromebook market size is expected to be more than 17 million units sale by 2023, up 5.3 million unit sales in 2014.

We believe that the emergence of high-end cloud computing, thinner laptops, and demand for fast processing is expected to bode well for the newly introduced CPUs and graphics card. This in turn will help AMD increase market share further, going forward.

Zacks Rank & Key Picks

AMD currently has a Zacks Rank #3 (Buy).

A better-ranked stocks in the broader technology sector is Castlight Health, inc. CSLT, 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 Castlight Health is projected to be 22.5%.

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