Advanced Micro Devices (AMD) is winning market share from Intel (INTC) in the PC processor market. Furthermore, several signs indicate AMD’s Ryzen is crushing Intel’s Core. We could see some interesting figures from AMD for this year’s second half.
AMD’s Microsoft win
Yesterday, Microsoft (MSFT) unveiled its flagship 15-inch Surface 3 laptop powered by AMD’s custom Ryzen CPU (central processing unit). It was the first time a laptop OEM (original equipment manufacturer) has preferred AMD over Intel in a flagship product. Microsoft’s 13-inch Surface 3 is powered by Intel’s Ice Lake CPU. The Microsoft win shows that laptop OEMs are considering AMD CPUs as a viable alternative in the high-end segment.
Intel’s high-end desktop price cuts
Recently, Intel announced a price cut for its upcoming Cascade Lake-X CPU. On October 1, VideoCardz revealed a leak suggesting Intel would be slashing prices for its upcoming HEDT (high-end desktop) Cascade Lake-X CPUs by 40%–50%. This price cut would align prices for Intel’s HEDT CPU and AMD’s second-generation Ryzen Threadripper. Yesterday, Intel confirmed the rumor was true. It is set to officially announce the new HEDT CPUs on October 7, and make them available in the market in November.
Investors’ fears have come true with Intel’s price cuts. A price war could benefit customers but impact Intel’s and AMD’s margins. Their stocks fell 4.3% and 2.3% in the first two days of October.
German retailer Mindfactory’s CPU sales figures
It’s no surprise that AMD’s third-generation Ryzen 3000 series CPUs are popular among customers. Tom’s Hardware first noted on August 26 that AMD’s Ryzen 7 3700X and Ryzen 9 3900X were out of stock at major e-tailers Amazon and eBay.
Reddit user Imgur, who releases German retailer Mindfactory’s monthly CPU sales data, showed that AMD reached a record last month. Of Mindfactory’s September CPU sales, 81% were AMD CPUs. Imgur noted that the sales boost came as the Ryzen 9 3900X was restocked. Although the Mindfactory data doesn’t show overall CPU demand, it gives us an idea of customer demand.
Interestingly, on September 20, AMD wrote in its community forum, “We are focusing on meeting the strong demand for our 3rd generation AMD Ryzen processors in the market.” By joining the dots, we can infer that AMD prioritized manufacturing the Ryzen 3700X and 3900X. It has also delayed its high-end Ryzen 9 3950X CPU’s launch by two months to November. From a business perspective, that delay makes sense, as the 3950X’s sales volumes may not be as high as the 3700X’s and 3900X’s.
Why are AMD and Intel stock falling?
Despite the good news, AMD stock has fallen along with other semiconductor stocks as the US economy slows. AMD stock has fallen 7.6% since September 23, whereas Intel and the VanEck Vectors Semiconductor ETF (SMH) have fallen 3%.
Now might be the right time to buy AMD. Although Intel has initiated a price war, that price war could be limited to the HEDT segment. As the company is facing a CPU supply shortage, it’s prioritizing its data center CPUs and higher-end PC CPUs.
AMD’s upcoming product launches could boost its stock in the next two months. According to a PC Gamer rumor, AMD might launch its midrange Radeon RX 5500 GPU (graphics processing unit) on October 7. The company has confirmed it will launch its Ryzen 9 3950X and third-generation Ryzen Threadripper in November.