Why NVIDIA Is a Lot Better Than Advanced Micro Devices

Advanced Micro Devices (AMD) has staged a great turnaround this year mainly due to the launch of its new graphics cards based on Polaris architecture, expectations for its Zen architecture, and the likelihood of its designs appealing placement in Microsoft and Sony’s upcoming consoles.

At present, many semiconductor companies are betting big on the virtual reality market, as it is continuously growing at a healthy rate. Advanced Micro Devices made a smart move by introducing cheaper graphics cards that support virtual reality as compared to NVIDIA (NVDA). The company released Radeon RX 480 for high-end VR headsets for just $200.

However, I think NVIDIA is a better option compared to Advanced Micro Devices.
As a matter of fact, NVIDIA was the first to launch its new architecture for graphics cards this year. NVIDIA placed its emphasis on a high-end market, as it launched GTX 1080 graphics cards first followed by GTX 1070 for mid-market.

On the other hand, Advanced Micro Devices launched its first graphics card based on Polaris architecture specifically for mainstream users.
Why NVIDIA Is a Lot Better Than Advanced Micro Devices
Image by JacekAbramowicz / Pixabay
But, it only took couple of weeks for NVIDIA to launch its new graphics cards GTX 1060 for mainstream users priced at $50 more compared to RX 480. Recently, NVIDIA also launched a new version of GTX 1060 for $199 to prevent Advanced Micro Devices from snatching market share.

Moreover, according to 5035 user benchmarks, NVIDIA’s GTX 1060 is performing much better than the RX 480. NVIDIA is already a market leader and its dominance in GPUs gives it a clear advantage. The company also introduced three new graphics cards for notebook that are VR-ready.

Additionally, the company also claimed that the cards processing capabilities comes within 10 percent of those of their PCs counterparts.

After the launch of Polaris, Advanced Micro Devices is also on its way to introduce its new Zen architecture for PCs. However, the massive risk for the company is that if Zen fails to win the robust market reception and corresponding demand that stockholders anticipate, the stock will crash as the hype going into the launch has already pushed the stock to multi-year highs.

Conclusion

The last two days have been disastrous for Advanced Micro Devices as the stock has given up almost 15% of its value. That being said, I still expect the stock to head lower in the coming months due to the fact that most of the positives are already priced in and a minor disappointment can send the stock crashing. I have been recommending investors to book profits for a long time, and given that Advanced Micro Devices is still up considerably YTD, I think the stock is a strong sell.

Comparatively, NVIDIA has managed to stay near $60 level despite the market sell off and I think investors should use the recent dip to add NVIDIA on the pullback.
Published on Sep 14, 2016
By Akshansh Gandhi

Copyrighted 2016. Content published with author's permission.

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