While Advanced Micro Devices shares have seen a significant rally in the last several weeks, the company still looks a bit unreliable. NVIDIA has been rising at the expense of AMD, a trend that’s going to continue with NVIDIA’s larger product offerings. AMD will need to significantly reshuffle itself to win back shares from the competitor, something that doesn’t appear likely at this moment.
Both AMD and NVIDIA are industry leaders in stand-alone, high-performance graphics processor manufacturing, and NVIDIA has got a huge market lead over AMD. In fact, in the last quarter, NVIDIA had an 81.1 percent market share.
AMD’s flagship chip, Fury X, is slower than NVIDIA’s GeForce GTX 980 Ti, and that’s the root of the problem. The company doesn’t get a lot of advantages from decreasing prices and maintains its margin study. Fury X is loaded with a Fiji die, and NVIDIA’s GeForce 980 Ti is built upon the cut-down kind of the GM200 GPU that Titan X utilizes.
Comparing the two, it’s easy to tell that they have nearly the same die size based on the same Taiwan Semiconductor Manufacturing Company’s 28-nanometer process. However, 980 Ti operative yields tend to be better, which is why it costs more.
AMD’s Fury X has new memory technology called High Bandwidth Memory, whereas NVIDIA’s processor uses GDDR5, which is right now less expensive than the High Bandwidth Memory. AMD doesn’t want to lower its prices, because executives realize that NVIDIA can handle the price war much better than them. Another reason? The company wants to garner as much revenue as possible from clients who want to use AMD products only.
The negative aspect from competing with NVIDIA can be seen from the company’s last quarter’s results. AMD had a per share earnings of $0.17, which is a drop of $0.05 from its previous earning share. Its reported revenue of $1.06 billion is higher than what analysts had estimated at $995.8 million.