Will NVIDIA Get the Better of Advanced Micro Devices Again?AMD) has been struggling for quite some time now. The chipmaker has succumbed to competitive pressure, as a result of which, the stock has taken a beating over the last few years.
Despite Advanced Micro Devices’ woes, many investors are confident that the company will reverse its fortunes and will come good in the long-term. I think the company’s long-term prospects are still unclear and I would still advise investors against initiating a long position in the stock for now. The reasons for my assessment are described below.
The Oculus Rift
In 2015, Advanced Micro Devices lost almost every battle against its primary opponent NVIDIA.
But this year, an enormous opportunity for both NVIDIA and Advanced Micro Devices will be virtual reality. The Oculus Rift, a VR headset designed by Oculus VR, is set to launch throughout the first quarter of this year. However, the price of the headset will be too high for a normal buyer, this latest first-generation headset will throw light on its feature and will indicate what’s more to come.
The Oculus Rift will be available in the market for around $599 which will need a powerful PC with a least price label of around $1,000. The PC that is to be used with the Oculus Rift requires a graphics card with robust performance, a NVIDIA GTX 970 or an AMD Radeon 290 at least, in order to process the 233 million pixels per second that the device blends through. PCs with low end graphics would not be able to process 233 million pixels, as it is almost twice as many pixels per second required for 1080p screen running at 60Hz
The highly expensive cost of the Oculus Rift makes the handset improbable to drive the escalated sales of graphics card, but it will surely cause many PC gamers to shift form lower specification graphics cards to high-end graphics cards. The device has the potential to improve the profit margins for both NVIDIA and Advanced Micro Devices. In the forthcoming years, if virtual reality concept turns into a successful concept and become more reasonably priced, graphics card sales could get an enhancement in the long-run.
As Oculus Rift provides opportunity to both the companies, yet NVIDIA’s products were far better than AMD’s products in 2015. Going by the past, it would be negligent to consider that NVIDIA will not dominate Advanced Micro Devices yet again. Given NVIDIA’s history of outperforming its rivals, I think it’s highly likely that Advanced Micro Devices will continue struggling.
Published on Jan 27, 2016By Akshansh Gandhi