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After Taking Intel Out, Is AMD About to Dethrone Nvidia? Analyst Weighs In

TipRanks
·3 min read

It was a busy week at Advanced Micro Devices’ (AMD) HQ. Q3 earnings, and confirmation of a $35 billion Xilinx takeover have been followed by a new product launch.

On Wednesday, AMD announced the release of the first products based on its gaming optimized RDNA 2 architecture: The Radeon RX 6800, the Radeon RX 6800 XT and the Radeon RX 6900 XT, priced at $579, $649 and $999, respectively. Code named Big Navi, the desktop GPUs will hit the shelves on November 18 (RX 6800 and 6800 XT) and December 8 (RX 6900 XT).

“Importantly,” said Deutsche Bank analyst Ross Seymore, “This is the first generation of AMD product in many years that, we believe, can truly be claimed to be competitive to NVDA’s highest-end gaming GPUs.”

Based on Seymore’s initial impression, “all three new AMD GPUs will be within 5% of NVDA’s equivalent offerings.”

In addition to performing on a similar level, the favorable pricing of both the 6800XT ($50 lower) and the 6900XT ($500 lower) to Nvidia’s equivalents, means AMD’s GPUs “present a strong competitive alternative to those at the highest end of the market.”

The release is causing excitement amongst gamers and Seymore notes comparisons are being made to AMD’s 2017 and 2018 early Zen CPU launches, following which, AMD began siphoning market share away from Intel - a process that is still playing out.  

Does Seymore believe AMD can do the same to Nvidia? Here, the analyst “hesitates” to make such a call. Nevertheless, Seymore believes the “launch appears to be a strong step in the right direction.”

“Overall,” the 5-star analyst summed up, ”We are impressed by AMD’s newest gaming GPU offerings, as they display significant improvements in efficiency and performance despite no node transition, all in slightly more than a year (typically we would’ve expected such performance increases over two years). While the lower-end pricing leaves a bit to be desired, overall we are impressed that AMD is in the same ballpark as NVDA’s latest GPUs given the significant gen-on-gen performance increase NVDA was able to achieve with their launch.”

However, AMD’s hot valuation keeps Seymore on the sidelines with a Hold rating. Seymore’s $75 price target remains as well and suggests shares will stay range-bound for now. (To watch Seymore’s track record, click here)

Overall, Seymore’s colleagues strike a more bullish tone. Based on 12 Buys and 6 Holds, AMD qualifies with a Moderate Buy consensus rating. The forecast is for 21% upside over the next 12 months, as indicated by the $92.71 average price target. (See AMD stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.