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AMD Poses Tough Competition With New 3rd-Gen Ryzen Processors

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Advanced Micro Devices’s AMD CEO and president Dr. Lisa Su during a ‘keynote presentation’ at Computex opened up about the company’s initiatives in computing, gaming and visualization technologies through product rollouts.

The company announced the much-awaited third generation AMD Ryzen desktop processor. The latest AMD Ryzen Threadripper 9 3900X processor features 24 threads and 12 cores. Additionally, per company’s laboratory tests, the new processor offers approximately 16% faster multi-thread performance when compared with nearest contender in the market, Intel’s Core i9-9920X. Further, the new processor delivers almost 47% more rendering performance over Core i9-7980XE.

In a bid to deliver an enhanced gaming experience AMD Ryzen Threadripper 7 3700X offers almost 30% greater multi-threaded performance compared with Core i7-9700K.  The new Ryzen Threadripper processor is developed on 12nm Zen 2 architecture.  These processors are scheduled to be made available on Jul 7, 2019.

Higher core counts of Threadrippers are anticipated to bolster the competitive position of AMD against Intel INTC in the high-end desktop market (HEDT) considerably.

AMD also announced the new Radeon RX 5700-series and X570 chipset. These cards are ideal for gamers who require superior graphic performance.

RX 5700 series mobile processors, which are developed on Zen 3 core architecture, feature high-speed GDDR6 memory. These processors are designed to support the PCIe 4.0 interface to offer high computing experience and cater to greater workloads and architectures. AMD Radeon RX 5700-series graphics cards are likely to be available in July this year.

AMD also launched RDNA, which supports PC-quality streaming to VR headsets, and Android and iOS-based mobile phones, providing desired speed for optimal graphics solutions required for notebooks and desktops. These graphics cards are designed to aid future of PC, console, and cloud gaming 

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 users.

Further, the company’s move to augment its processor portfolio reinforces its competitive position against the likes of NVIDIA NVDA.

 AMD stock has returned 97.9% in a year’s time, substantially outperforming the industry’s rally of 1.03%.

 

What Investors Should Know?

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 (Hold).

A better-ranked stock in the broader technology sector is Cadence Design Systems, Inc. CDNS, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Cadence is projected to be 11%.

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