Advanced Micro Devices (NASDAQ: AMD) shares have fallen off a cliff over the past month, as investors are probably concerned about whether it can sustain its rally in the face of a fading tailwind and rising competition . NVIDIA (NASDAQ: NVDA) has launched a new generation of graphics chips to reclaim its lost market share. The chipmaker has won a lot of money thanks to cryptocurrency mining. .
Still, it will not be surprising to see AMD turning investor sentiment in its favor when it releases its fiscal third quarter results on Oct.
AMD can get a shot in the arm …
Image Source: AMD.
19659008] It looks like AMD deliberately kept Wall Street's expectations on the lower side while releasing its fiscal second quarter results back in July.
AMD blames weak GPU sales to the cryptocurrency market for this slowdown, and the company's guidance had called for annual revenue growth of just 7% during the quarter ending in September. maar recent ontwikkelingen geven aan dat het gemakkelijk kan overtreffen de low-balled guidance.
For eksempel, dets andel af GPU-markedet steg til 36,1% i juni-kvartalet fra 30,3% i den foregående periode . Det er trolig at AMDs GPU-markedsandel økte i tredje kvartal, fordi NVIDIA-loyalister ville ha refrained fra at købe nye kort, da den sidstnævnte forberedte at lancere sin næste generations chips ved september slut.
On the other hand , AMD looks all set to make a bigger dent in the market for computer and server CPUs (central processing units) thanks to Intel 's (NASDAQ: INTC) supply constraints. A shortage of Intel CPUs will push PC OEMs (original equipment manufacturers) towards AMD's offerings. Not surprisingly, research firm Fubon believes that HP will use AMD's processors across 30% of its consumer PC lineup, while Dell will be deploying them into more commercial PCs.
AMD is witnessing a similar resurgence in the market for server processors as well . Reports suggest that Intel has been forced to slash prices of its Xeon server processors in response to the rising demand for AMD's EPYC chips. In fact, AMD's server market share reportedly hit 1% for the first time in four years in the second quarter of 2018, and going to Intel's rumored price cuts, it is likely that the market share gains continued in the third quarter as well. 19659004] As such, AMD has the potential to trump Wall Street's expectations when its third quarter results are released.
AMD has done well to sink its teeth into The GPU market by putting NVIDIA on the back foot, but the latter is all set to make a comeback thanks to its new products. Additionally, AMD has admitted that "lower sales of GPU products in the blockchain market" have started weighing on its business.
These two factors can knock the wind out of AMD's GPU business in the coming quarters, primarily because archival NVIDIA is now in een sterkere positie om vast te leggen op gaming-gerelateerde vraag. If it stands, NVIDIA's latest graphics cards are already on sale. Meanwhile, AMD's next-generation graphics chips based on the 7-nanometer (nm) manufacturing process are expected at the end of the year.
This means that AMD is going to miss out on a seasonally strong period of the year when GPU Resellers start stocking up new products in anticipation of the holiday season. Of course AMD looks well placed to gain more market share in servers and PC processors, but it is unlikely that they will pull enough strings to offset the potential weakness in graphics cards.
That's because the company has clearly blamed weak GPU sales for its single-digit top-line growth during the third quarter, indicating that it needs to sell more graphics cards to give its top line a significant boost. Men hvis det ikke er tilfældet, så kan AMD's outlook være underwhelming igen, og det vil ikke være godt for investorer.