Why You Should Dump AMD and Buy NVIDIA Ahead of Earnings

Both Advanced Micro Devices (AMD) and NVIDIA (NVDA) have rallied as of late. While Advanced Micro Devices has rallied on the hopes that the RX 480 will kick start the company’s turnaround, NVIDIA has inched higher consistently due to its presence in several high growth segments.

AMD’s RX 480 can fry PCIe slot

NVIDIA and AMD are the two most significant stocks in the graphics card industry. At present stage, NVIDIA accounts for the leader of the GPU market with approximately 80 percent market share, whereas the remaining 20 percent belongs to AMD.
Both NVIDIA and AMD recently launched their new graphics cards based on their new architecture Pascal and Polaris, respectively.

NVIDIA formerly launched GTX 1080 and GTX 1070 purely for high-end market, whereas AMD launched Radeon Rx 480 for mainstream market. AMD’s RX 480, priced at $200 for 4GB model and $240 for 8GB model, apparently proposes equivalent performance compared to NVIDIA’s prior generation GTX 980 card, which was available for an extra $100. But, none of the cards based on Polaris architecture have been launched by AMD to compete against NVIDIA’s GTX 1080 and GTX 1070.

However, it was anticipated that AMD has played a smart move by first focusing on the mainstream market and that will help the company to win back some market share, but AMD’s strategy has hit a roadblock. History has repeated itself again as AMD has proved that it has a habit of over promising and under delivering.

Just after the launch of RX 480, the company started getting complaints regarding over power draw by RX 480 cards. AMD, at the time of the launch claimed that RX 480 will draw maximum power of 150W, but initial reports displayed that many cards drew more than 170W from some systems. Moreover, the RX 480 has been designed to draw a maximum of 75W from PCIe slot, but many cards drew up to 90W from PCIe slot. This is a major issue and can eventually burn the PCIe slot.

Recently, AMD detailed that it has been working on an updated driver to overcome this problem, but it is not clear whether a software update can make the card perform in an efficient manner. However, it can be certainly said that this incident will badly affect AMD’s GPU business and provide a boost to NVIDIA’s Pascal based graphics cards.


While both the stocks look overvalued, NVIDIA can continue moving higher into the earnings. AMD, on the other hand, has rallied too far and it will be very difficult for the company to come up with numbers that justify this uptrend.
Published on Jul 21, 2016
By Akshansh Gandhi

Copyrighted 2020. Content published with author's permission.

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