not vested
Advanced Micro Devices (AMD) reported in-line profits and revenue.
However, AMD gave a third-quarter revenue forecast below analyst projections, as gaming console chip demand falls.
Source: CNBC
While the market likes the forecast for nearly 30% revenue growth this year, the company still only has a small market share of a global market with an estimated annual value of $79 billion.
The company has a new target of 20% annual revenue growth and gross margins exceeding 50%.
Despite what some investors view as an expensive stock as AMD trades at nearly 40x 2020 EPS estimates, the stock quickly becomes a bargain in out years. The company doesn’t even reach 25% market share in their target markets while pushing EPS up to $2.66 in 2023.
1. Intel Counterattacks
2. ARM-Based Solutions Will Start Stealing Server Workloads
3. Apple Will Start Leaving x86 In 2021
4. Apple Will Likely Also Start Using Its Own GPUs
5. Intel Is Entering The GPU Market
6. FPGA/ASIC Solutions Are Set To Take Away Some AI Server Workloads Away From GPUs
Between now and 2021, AMD is still likely to expand its GPU server market share, its CPU PC/server/laptop market share, and it will also see the launch of a new console generation.
But many of the changes highlighted are structural.
Simply put, the markets AMD (and Intel, and Nvidia) sells into are going to turn structurally less interesting due to the incoming surge in competition.
Advanced Micro Devices’ chips are being used in some of the big-name consoles, including Sony’s (NYSE:SNE) upcoming PlayStation 5 and Microsoft’s (NASDAQ:MSFT) Xbox.
Advanced Micro Devices has a two-year production lead over Intel.
AMD to steal roughly 30% of INTC's market share over the next two-to-three years. In four-to-five years Lipacis says that figure could grow to 50%.
Mercury Research estimates that AMD held 19.2% of the desktop CPU market at the end of the second quarter of 2020.
Mercury Research points out that AMD's notebook processor market share stood at 19.9% at the end of the second quarter.
Notebook processors account for almost two-thirds of the market for consumer processors.
AMD is about to release processors based on the next-generation Zen 3 architecture soon.
The new processors are expected to be around 20% more capable than the company's current offerings, and have faster clock speeds and improved efficiency.
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