Advanced Micro Devices Inc.'s (AMD) Loss Is NVIDIA Corporation's (NVDA) Gain

NVIDIA Corporation stock recently broke above the psychological $100 level. However, NVDA stock could be headed higher from here.

Nvidia Corporation (NVDA) Gain Is Advanced Micro Devices Inc (AMD) Loss
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Shares of Santa Clara, California-based NVIDIA (NASDAQ:NVDA) have gained 3% through this week, closing the last trading session at a price of $102.55 per share. In contrast, shares of Sunnyvale, California-based rival AMD (NASDAQ:AMD) have dropped by nearly 5% from this week's open price of $14.48, to close the last session at a price of $13.98 per share. The recent movements in NVDA stock price and AMD stock price seem to be in total contrast to their respective performances in the year to date time frame. While AMD stock has notched up impressive gains of 23.3% in the year to date, NVIDIA stock had a relatively horrible time, dropping nearly 4% in the same timeframe. However, the recent change in direction of the stock price movements of the two companies could be a sign of things to come. The misery for NVIDIA's shareholders could be coming to an end, which could partly come at the expense of AMD. While we believe both AMD and NVIDIA could gain big from rapid growth in the AI, data center and autonomous car markets, NVIDIA seems to have edged ahead once again, which should help put an end to the misery of NVIDIA stockholders.

Will NVIDIA's GTX 1080TI Beat AMD 'Vega'?

In what has come as a probable surprise, given the tremendous hype which has surrounded AMD's upcoming Vega GPUs, credible benchmarks show NVIDIA's latest GTX 1080 Ti on top in performance comparisons. The CompuBench database now lists a new device codenamed 'AMD 687F:C1,' which, according to VideoCardz, is the all new AMD Vega GPU.  VideoCardz believes this is the GPU which was used in the Doom ultra4K demo at CES 2017. More importantly, the Vega launch could be weeks away, rather than months.

As detailed by Mark Hibben in his Seeking Alpha post, AMD Vega falls short of the GTX 1080 Ti on every test in the CompuBench 1.5 desktop benchmark. However, the two GPUs performed closely on most of these tests, which can see AMD catch up through driver optimizations on its VEGA GPUs. A bigger worry should be the huge gap between the GTX 1080 Ti and the 687F:C1 on the CompuBench 2.0 desktop tests, where AMD's chip falls behind its NVIDIA counterpart in most tests by over 50%.

While the CompuBench tests might not be the final verdict on AMD's Vega GPUs, it could indicate that expectations are sky high, as far as the Vega GPUs are concerned. As Mark wrote, "OpenCL benchmarks don't paint a full picture of GPU performance, of course, but it's not a good sign that AMD's Vega falls short of Nvidia's year-old Pascal architecture in every single test."Expecting AMD to close such huge gaps in the short time to launch would be unrealistic, to say the least. Also, the fact that AMD will be competing against NVIDIA's GTX 1080 Ti, which will be cheaper to produce as it doesn't use HBM2 memory, will also stack the odds against AMD. Competing on price might not be an option for AMD this time around. The results from the initial benchmarks could lead to some selling in AMD stock, while this could just be the catalyst NVIDIA stock needs to surge higher. A look at the technicals indicates that NVIDIA stock might well be headed higher.

NVDA stock has breached its 20-day moving Average

NVIDIA technical charts indicate bullish momentum. The first trading day of the week (March 13) saw NVIDIA stock close above the key psychological level of $100 per share. More recently, NVDA stock closed above its 20-day moving average, which is an indicator of bullish momentum.

NVDA stock technical chart

Source: stockcharts.com

MACD crossovers are followed by a number of technical traders. When the MACD cuts the signal line from above, it is a bearish signal, which indicates that it may be time to sell. On the other hand, when the MACD rises above the signal line, the crossover is a bullish signal, which suggests that the price of the asset is likely to experience upward momentum and it might be the time to buy. As seen in the NVIDIA stock technical chart above, the MACD line has cut the signal line from below, which is a bullish indicator. The bullish MACD crossover, along with the bullish 20-day moving average crossover indicates that NVDA stock may be headed higher in the coming trading sessions.

Final Thoughts

A lot of expectations have accompanied the hype surrounding Advanced Micros Devices' Vega GPUs. However, initial compute benchmarks indicate that NVIDIA has pulled ahead of its smaller rival, once again. More importantly, the margin of outperformance by NVIDIA's GTX 1080 Ti in some of the tests might be just near impossible for AMDs Vega chips to overcome in the short time before launch. However, this is not the final verdict and is definitely not the 'deathly blow' for AMD, as the AI, data center and autonomous car markets are growing at a rapid pace, good enough accommodate the two competitors. But, this might just be the catalyst which NVIDIA stock needed to reverse its recent downtrend.

Looking for tech stocks to buy? Do take a look at our top stock picks, which have beaten the NASDAQ by over 130%. If you're interested, we have also picked our favorites from the auto sector, which have beaten the S&P 500 by close to 160%.


NVIDIA Stock Articles & Video


Virendra Singh Chauhan Virendra Singh Chauhan   on Amigobulls :

Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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Comments on this article and NVDA stock

chincato
bullish
It's not about AMD dethroning anyone. AMD's Ryzen provides among the highest throughput CPUs at half the cost. Mission accomplished. This will undoubtedly capture market share from intel. AMD Naples will continue to do just that in the Server offering. AMD Vega also will be extremely decent for its pricepoint, therefore it will also retain marketshare in the enthusiast space but that's not where the money is; Vega's architecture is obviously designed to be a 'virtual super GPU' for the cloud, something Nvidia does not have. This is the only way GPUs can be leveraged efficiently in the cloud for multiple users as well as huge workloads for whatever the latest trends in computing.Scalable and price/performance efficient. Nvidia's GPU clusters in universities etc running CUDA and proprietary code has been great for ease of programming but very far away from efficient, it cannot scale performance-wise and definitely not cost-wise.

And in the mean time Raven Ridge APUs later this year will pretty much thrive in mainstream computing that leverage the cloud. Neither Intel nor Nvidia can match up here.

Therefore, I put my money where the growth opportunities are and so far AMD is investing in the right direction.
1 reply
Dex4Sure
bullish
AMD has never really beat NVIDIA. Its been always close but still behind. In the recent years NVIDIA has been able to run away on the high end, and Intel managed to do that years ago with Sandy Bridge. But AMD has still room to grow, especially Naples server CPU is very promising and Ryzens are good processors for workstations. They are not that great gaming CPU's.
1 reply
user profile picture
shawn.duffy19
neutral
Nvidia stock had been sitting above 100$ for weeks if not longer, for some time. As the launch for Ryzen approached their stock began to slip. But the hype is over. AMD ... did okay with its release but as I mentioned, the hype was just that; hype.

The new Ryzen CPUs are not bad for what they are but they aren't the killers to Intel's CPUs people thought or hoped they would be.

This is where Nvidia gets to recover. Because they deal strictly with GPUs, they only have to contend with GPUs. AMD deals with Nvidia AND Intel and as of yet, they're still struggling.

We'll have to see if their new Vega GPU brings them back.
3 8 reply
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heidiandben2010
neutral
Obviously you know nothing. A slightly under clocked Ryzen 1700 at 3.0Ghz under load draws 30w and has cinebench score in >900. Intel's low powered offering Atom processor draws 35w under load , cb score 400<. Intels full Xeon processor that gives the same performance of an underclocked Ryzen CPU is 90w-140w.
So Intel's low power processors series draws more power than full blown AMD processor.

That is game over for Intel in the server market when AMD launches their Naples processor until they can cut there power by 60-80%.Or Intel will have to pay off vendors again.

Ryzen is all about getting a fast low powered core to launch into the server market with Naples.



user profile picture
virendra
bullish
Well, If the Ryzen launch has taught one lesson, that is: Don't expect AMD to dethrone NVDA overnight in GPUs (The Vega buzz could mislead you there).

It's a long battle and a competitive Vega GPU will only be the first step in the right direction.
2 5
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