Advanced Micro Devices
AMD
recently announced the launch of its new gaming processor AMD Ryzen 7 5800X3D. The new processor is expected to expand the portfolio of Ryzen line-up.
The new AMD Ryzen 7 processor is the first of its kind to feature AMD’s 3D V-Cache technology, which is anticipated to increase gaming performance by 15% compared with other processors without the cache technology.
AMD also announced the new Ryzen 5 and 3 series processors and expanded chipset compatibility to cater to different customer bases across various price segments.
The new processor will be available in the market from Apr 20, starting at $449.
New Ryzen Model to Drive AMD Top Line
AMD has been riding on robust performance from the Computing and Graphics segment. The fourth-quarter 2021 results are a testament to the same. It has been benefiting from strong sales of its Ryzen server processors, courtesy of the increasing proliferation of AI and Machine Learning in industries like gaming and supercomputing domain.
In the fourth quarter of 2021, the Computing and Graphics segment reported revenues of $2.6 billion, reflecting an increase of 32% year over year. The upside can be attributed to higher Ryzen processor sales.
This Zacks Rank #1 (Strong Buy) stock has returned 32.3% in the past year compared with the Zacks
Electronics – Semiconductors
industry’s growth of 4.3%. Meanwhile, the Zacks
Computer and Technology
sector declined 7.4%.
Advanced Micro Devices, Inc. Price and Consensus
However, in the traditional computing market, which generates a chunk of its revenues, AMD is up against
Intel
’s
INTC
strong market position. With Intel systems so well entrenched, there is an obvious preference for system integrators to choose Intel processors over AMD.
So far, Intel processors have exhibited superior functionality, enabling the company to exercise pricing power. In the past, AMD was forced to resort to penetration pricing, which severely impacted its profitability. Now that it is getting into the higher-range segment, it is facing very stiff competition from Intel.
AMD faces significant competition from
NVIDIA
NVDA
in the GPU market. NVIDIA’s GPUs are rapidly benefiting from the proliferation of AI. By applying its GPUs in AI models, the company is expanding its base in the other untapped markets like automotive, healthcare and manufacturing, which will support its earnings and revenues.
A steady ramp-up of the new products has been enabling the company to gain a competitive edge over the likes of AMD and Intel, and widening its market share.
Another Stock to Consider
While AMD is a lucrative stock to buy, here is another stock to consider in the broader computer and technology sector.
Arista Networks
ANET
currently sports a Zacks Rank #1. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Arista shares have returned 67.5% in the past year against the Zacks
Communication – Components
’ and the Zacks Computer and Technology sector’s fall of 3.9% and 7.4%, respectively.
5 Stocks Set to Double
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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