Advanced Micro Devices, Inc. AMD recently announced the launch of the new AMD Radeon Pro 5600M Mobile GPU for Apple’s AAPL 16-inch MacBook Pro laptops.
The GPU leverages 7 nanometer (nm) process technology and AMD RDNA architecture. It supports a wide variety of complex workloads like video editing, color grading, application development and game creation, among others, to enhance user experience.
Moreover, the Radeon Pro 5600M features 40 compute units and 8GB of high-speed HBM2 (High Bandwidth Memory) as well as 5.3 TFLOPS (FP32) of single-precision floating point performance.
These robust features are expected to drive adoption of the new MacBook Pro laptops which is likely to boost AMD’s brand reputation and boost investors’ optimism in the company’s stock.
Notably, shares of AMD have returned 19.2% in the year-to-date period against the industry’s rise of 1.4%.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
Solid Momentum of AMD Mobile GPUs Holds Promise
AMD’s growing portfolio of mobile graphics cards bodes well as the company is witnessing robust traction for the same.
Notably, the company’s GPUs have enjoyed strong popularity among the industry’s top laptop manufactures like Dell DELL and Apple.
Markedly, the recently launched Dell G5 15 SE comes with the Radeon RX 5600M GPU and a Ryzen 400-series H-mobile processor which work together with AMD SmartShift technology to dynamically shift power between the CPU and GPU to improve performance.
Moreover, the company’s Radeon Pro 5300M and 5500M mobile GPUs already feature in Apple’s entry level MacBook Pro 16 series. Additionally, the company’s 2019 MacBook Pro can now be upgraded with Radeon Pro W5700X GPUs.
The growing clout of Radeon Mobile GPUs is a tailwind for AMD. It is expected to drive the company’s top line in the upcoming days. Moreover, this momentum is likely to continue, driven by the increasing demand for laptops thanks to COVID-19 induced work-from-home and e-learning trends.
Stiff Competition Likely to Dampen Growth
Although AMD’s strengthening Radeon Mobile portfolio holds promise, intense competition from NVIDIA NVDA in the GPU market is a concern.
Notably, even though AMD’s discrete GPU market share rose to 31% in first-quarter 2020 from 22.7% in the prior-year quarter, NVIDIA still controls a large chunk of the market with 69% market share.
NVIDIA recently announced that the GeForce RTX 2080 Super and RTX 2070 Super graphics cards, which were released for desktops in 2019 will now be available for laptops as well. Moreover, the company’s existing GPUs like the RTX 2060 have witnessed solid traction among laptop OEMs like ASUS and Lenovo. Markedly, Lenovo Legion Y740 and Asus ROG Zephyrus S GX701 utilize RTX 2060 GPUs.
Further, growing uncertainty in the market due to the coronavirus pandemic could become an impediment to AMD, which currently carries a Zacks Rank #4 (Sell). Also, increasing expenses on product development are expected to keep margins under pressure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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