Advanced Micro Devices, Inc. (AMD) is trying to outrun Intel Corporation (INTC) once again with its latest offerings. AMD stock could gain big from this.
Shares of Sunnyvale, California-based Advanced Micro Devices Inc (NASDAQ:AMD) have made a good start in 2017 with a YTD gain of almost 19%. There were a lot of expectations from AMD stock after it delivered 295% returns in 2016. A lot of that was centered around its Zen CPU launch and indeed, AMD stock made tremendous gains on the Ryzen CPU pre-launch hype. But once the reviews of Ryzen CPUs were out, which were not that positive, AMD stock sold-off.
However, AMD is all set to gain at the expense of Intel (NASDAQ:INTC) in the long run. The Sunnyvale company is leaving no stone unturned to take on the Chipzilla on all fronts. With its Naples Server CPU already previewed, it is all geared up to challenge Intel's data center dominance as well. Further, if some latest rumors are to be believed, AMD is working on a new 16 Core/32 Thread Ryzen CPU to take lead in the performance segment as well. If the rumors were to hold true, Intel should be worried. Let's take a closer look.
AMD Aiming For The Performance Crown.
AMD's Ryzen CPU has made the company competitive again in the CPU business. Though the Ryzen lacks gaming performance, it is credible play in all other aspects. The mixed reviews have not stopped the Sunnyvale chipmaker from targeting Intel in the high-performance segment. A post on Forbes confirms the rumor of AMD working on a beast 16-core, 32-thread CPU to take the performance crown too from Intel. The Forbes post states that this CPU is aimed to take on Intel's current flagship desktop CPU - the Core i7-6950x which has only just 10 cores and 20 threads. It is interesting to note that the i7-6950X was the only Intel CPU to soundly beat the flagship Ryzen 7 1800X in most tests. If you take into account of how the latest Ryzen CPUs have performed, this new chip (called the X399) could be the ultimate desktop CPU for high-end desktops with the latest specs.
Also, as the author of the Forbes post points out this chip could seriously undermine Intel's share as this CPU could be $1000 cheaper than i7-6950X which costs about $1700. The rumored Ryzen CPU could come in different models like the Ryzen 7 CPUs with the flagship chip costing around $1000. The Forbes post further explains the various technical advantages of the rumored CPU over its Intel counterpart. There are few doubts about this rumor too. This CPU is reported to have a Land Grid Array (LGA) socket like Intel has currently - unlike the present Ryzens, which conflicts with current AMD philosophy. However, if this were to be true, AMD is clearly looking to dislodge Intel at the high-end with its all-new X399 chipset. Even after all the doubts, industry experts are of the view that AMD can easily roll out a 16 core Ryzen processor.
Intel should be more worried about the Ryzen 5 CPUs.
AMD had recently announced the launch of Ryzen 5 CPUs, which are targeted at the mainstream PC market. Though the bragging rights are in the high-end CPUs, the mainstream market is the place where volumes are. As a ZDNet post highlights, "Ryzen 5 is a much bigger deal than Ryzen 7 because the mainstream processor sub-$300 market is about twice as big as the high-end market processor market. And AMD's re-entry into this mainstream market presents a real threat to Intel's dominance over the PC industry." To add to that, an ExtremeTech post gives a comparison between Ryzen 5 family and its Intel counterparts, which clearly spells bad news for Intel. The post highlights that the Ryzen 5 family CPUs score handsomely over the Intel i5 CPUs. Some of them give tough competition even to Intel's high-end i7 chips at almost half their cost. However, all this need to be validated once the chips are in the market on April 11. For now, AMD's present set of products are gunning for Intel's Kaby Lake Core chips after taking a serious shot at Intel’s top-end Broadwell-E chips. Given how Ryzen 7 CPUs are featuring in the Top 15 best selling CPUs consistently, AMD could expect better gains going ahead.
Putting It All Together.
Adding one new high-end chip to its portfolio for AMD would not be a massive statement for AMD but its success to deliver a competitive product would clearly indicate that AMD is here to stay. AMD is known for promising and failing to deliver many times. Given that AMD is almost 10 times smaller than Intel in terms of man count and market capitalization, AMD has made a good start. It is all set to outrun Intel once again this year. AMD stock could gain massively with the Sunnyvale chipmaker gaining market share at the expense of Intel. All these indicate AMD stock still remains a good buy.
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