AMD Steals Computex 2019 With Launch of Five Processors

AMD Steals Computex 2019 With Launch of Five Processors
May 29, 2019

 

Shares of the semiconductor chip manufacturer Advanced Micro Devices, Inc. (Nasdaq: AMD) rallied nearly 8.06% or $2.13 to close at $28.57 yesterday after the company unveiled a range of PC and gaming chips with eyebrow-raising specifications and more affordable pricing at Computex 2019, the world’s biggest computer trade event. As per Wall Street analysts, the launch of a new range of chips is expected to propel the stock further. AMD shares have gained 53% so far in 2019 and 97.9% over the past 12-month period, significantly outperforming the sector’s gain of 1.03%.

During a ‘keynote presentation’ at Computex, the CEO and president of Santa Clara, California-based Advanced Micro Devices, Dr. Lisa Su, presented the company’s initiatives in gaming, computing, and visualization technologies via new product offerings. Specifically, AMD unveiled its third generation Ryzen processors.  AMD manufactures processors that function as the major computing chip for PCs, graphics, and cards servers.

The company unveiled the long-awaited third-generation AMD Ryzen desktop processor.  The AMD Ryzen Threadripper 9 3900X processor consists of 24 threads and 12 cores. Furthermore, based on the company’s lab tests, the latest processor provides roughly 16% quicker multi-thread performance when compared with Intel’s Core i9-9920X, the nearest competitor. The processor also delivers approximately 47% more rendering performance over the Core i9-7980XE.

In an attempt to offer an improved gaming experience, AMD Ryzen Threadripper 7 3700X provides nearly 30% more multi-threaded performance versus Core i7-9700K.  The Ryzen Threadripper processor is built on 12nm Zen 2 architecture.  These processors are planned to be launched on Jul 7th, 2019. Higher core counts of Threadrippers are expected to significantly improve the competitiveness of AMD against Intel in the high-end desktop market (HEDT).

In addition to the above-mentioned processor, AMD also introduced the new Radeon RX 5700-series and X570 chipset, aimed at gamers who look for top-class graphic performance. AMD also introduced the RDNA (graphic card), which enables PC-quality streaming to VR headsets, and iOS and Android-based mobile phones, offering adequate speed for improved graphical solutions needed for desktops and notebooks. AMD is entering into the top-end graphics card market with the launch of these cards. As a result, the company’s revenues are expected to increase significantly. The five new Ryzen desktop processors, with prices ranging between $199 (Ryzen 5) and $499 (Ryzen 9), will be available in the market from July 7th onwards.

On the performance front, AMD’s earnings have increased from $0.083 to $0.27 in a year.  Furthermore, EBIT margins have increased to 6.8% from 4.1% in the same period.

Regarding the introduction of new chips, Cowen & Co. analyst Matthew Ramsay said that AMD “[stole] the show” with its announcements: “We anticipate these products will drive above-consensus growth, share gains, margin expansion and AMD share appreciation.”

Ramsay has issued an “outperform” rating to the stock, with a target price of $36.

Similarly, Wells Fargo analyst Aaron Rakers opined that the recent announcements of AMD highlight “very compelling price points versus Intel (Nasdaq: INTC) Core i7/i9 processors.”

Rakers further believes that AMD will also “leverage a completely new Radeon DNA (RDNA) architecture” with improved performance of its next-generation GPUs. Rakers has given an “outperform” rating for the stock, with a target price of $38.

With total focus, AMD continues to grab market share from Intel, which leads the computer CPU space.  In February, AMD claimed that its market share had reached its peak since 2014.

The market is anticipated to respond positively to the launch of new processors.

Technically, the stock continues to receive strong support from the 50-day moving average. Additionally, the MACD indicator is ascending in the positive region. As a result, we can expect the stock to rally in the short-term.

amd - technical analysis - 29th May 2019

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Janine

Janine

Janine is our editor for related stock market news. Andrew and Janine will be focusing on providing the latest trends and where the next hit could be


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