Is Advanced Micro Devices Fighting a Lost Battle?

In 2015, Advanced Micro Devices (AMD) accounted for only 20 percent market share in the graphics card market, whereas NVIDIA commanded 80 percent of the market share. Despite Advanced Micro Devices’ shrinking market share, the stock managed to rebound in the last quarter of 2015, appreciating almost 10% in the reference period. However, the rally has proven to be short lived and I expect the company to continue losing market share to peers in the future.

In terms of PC processors, Advanced Micro Devices remains its prime competitor, Intel, and in terms of graphics section, the company is lagging NVIDIA by a wide margin.
Advanced Micro Devices hopes to close up the gap as it is about to launch its new PC architecture.

However, none of the company’s product performed better than NVIDIA’s products, except one, Radeon R9 380X. Advanced Micro Devices Radeon R9 380X was launched in November 2015, and offers solid performance to purchasers at an attractive price.

Advanced Micro Devices has struggled to compete NVIDIA’s high-end graphics processors by proposing quality graphics cards at more affordable costs. In 2015, the company tried to snatch some market shares from NVIDIA, when it launched its new high-end graphic card, Radeon Fury X, grounded on Fiji architecture. However, according to the third party reviews, Radeon Fury X proved less than satisfactory.

Radeon Fury X was available in the market at approximately the same price as that of NVIDIA’s 980 Ti. The Fury X performed well in the starting month, but eventually did not manage to stand up to NVIDIA. Instead, Advanced Micro Devices’ Radeon R9 380X occupies a position between NVIDIA’s approximately $200 GTX 960 and the $300+ GTX 970. Radeon R9 380X, available at few dollars less, beats the GTX 960, but was not capable to match GTX 970’s performance.

The GTX 970 is much faster, but quite a bit expensive than the R9 380X. At this point, it is safe to state that Advanced Micro Devices holds a discrete edge on performance for the value, although it has been the circumstance that all this generation are not going to match NVIDIA’s power efficiency.

Hence, if Advanced Micro Devices will be able to regain some of the market share remains to be seen. For now, I think the stock is too risky to be considered as a speculative investment. For the time being, investors should watch the future developments from the sidelines and only buy the stock is a better entry-point presents itself.
Published on Jan 15, 2016
By Akshansh Gandhi

Copyrighted 2020. Content published with author's permission.

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