Intel’s headwinds are AMD’s tailwinds
Previously, we saw that Intel (INTC) is facing delays in its 10nm (nanometer) manufacturing node. This delay has given way to rival Advanced Micro Devices (AMD) to close its technology gap with Intel and offer competitive CPUs (central processing units) in the PC and server markets.
This year was an inflection point for AMD, as its new products were well adopted. Its Vega GPUs were popular among crypto miners, its EPYC server CPU gained traction among cloud and HPC (high-performance computing) companies, and its second-generation Ryzen CPUs were in high demand. In the fourth quarter, Intel suffered a CPU supply shortage due to an unexpected surge in PC and server demand encouraging some customers to switch to AMD’s products.
AMD expects new products to account for more than 50% of its 2018 revenue and to mark its second straight year of growth over 20%. It expects its server CPU market share to expand from less than 1% to 5%.
AMD’s stock performance this year
Intel’s headwinds and the strong growth momentum, especially in the server market, made AMD 2018’s top-performing stock—by September, it had risen 211%. While much was working in AMD’s favor, the end of the crypto trend then slowed its growth, sending the stock down 51% from its 18-year high of $34.40 in September.
AMD’s business next year
Next year, AMD is set to focus on its enterprise business by launching the world’s first 7nm data center GPU (graphics processing unit) and CPU on TSMC’s (TSM) manufacturing node. If these 7nm products succeed, AMD’s manufacturing technology could pull ahead of Intel’s, accelerating the adoption of AMD’s products. AMD expects these 7nm products to help grow its server CPU market share by a double-digit percentage rate next year. Investors should keep an eye on AMD’s product launches and third-party reviews of these products, as these launches could drive its stock price. Next, we’ll look at NVIDIA.
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