Advanced Micro Devices (NASDAQ:AMD), Inc. AMD recently unveiled the latest Ryzen 4000 Series Desktop Processors and Athlon 3000 Series Desktop Processors, which feature built-in Radeon graphics and are designed for the commercial as well as consumer PC markets.
The processors are developed on AMD’s ‘Zen 2’ core architecture utilizing 7 nanometer (nm) process technology and offer optimal power efficiency and enhanced user experiences in the AMD socket AM4 platform.
The AMD Ryzen 4000 G-Series and Athlon 3000 G-Series processors are targeted toward gamers and streamers. The most basic model (Athlon Silver 3050GE) features a core of 2 with 4 threads, while the most advanced model (AMD Ryzen 7 4700G) features a core count of 8 with 16 threads.
Meanwhile, the new AMD Ryzen PRO 4000 Series and AMD Athlon PRO 3000 Series processors have been designed with enterprise customers in mind. Moreover, the processors come with enhanced security features like AMD Memory Guard and AMD Secure Processor. The base AMD Athlon Silver PRO 3125GE model features a core count of 2 with 4 threads, while the advanced AMD Ryzen 7 PRO 4750G model has a core count of 8 with 16 threads.
These robust features are expected to drive adoption of the new processors in the market. This in turn will boost AMD’s revenues in the upcoming days and boost investors’ confidence in the company’s stock.
Notably, shares of AMD have returned 24.3% in the year-to-date period compared with the industry’s rise of 6.4%.
Advanced Micro Devices, Inc. Price and Consensus
As more people are being forced to stay indoors due to the coronavirus led shelter-in-place orders, there has been increased user engagement for gaming and game streaming. This is boosting demand for gaming PCs and hardware. Per Newzoo’s research report, the global video game market is expected to reach $159.3 billion in 2020.
Moreover, surge in remote work trends stemming from the coronavirus pandemic is driving demand for PCs among business enterprises. Organizations of all sizes are looking to purchase PCs that offer enhanced performance and security to meet the changing work environments.
These factors have led to a significant improvement in PC shipment trends. Per the latest IDC report, shipments were up 11.2% on a year-over-year basis to 72.3 million in second-quarter 2020.
The growing momentum of PC shipments, driven by work-from-home and gaming, is likely to positively impact PC-makers which bodes well for the adoption of AMD’s processors that are designed specifically for gaming and business purposes.
Notably, the latest Ryzen 4000 G-Series Desktop processors have already been adopted by notable PC OEMs like HP Inc (NYSE:HPQ). HPQ and Lenovo LNVGY. The Lenovo IdeaCentre 5 features the Ryzen 4700G Desktop processor. The ThinkCentre M75t, M75s and M75q business PCs will be powered by Ryzen PRO 4000 Series Desktop processors.
The growing traction of the latest processors favor the long-term growth prospects of AMD, which currently carries a Zack Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Persistent Risks
AMD is likely to be affected by COVID-19 induced broader macroeconomic weakness prevailing in the market.
Also, increasing expenses on product development are anticipated to limit margin expansion. Further, stiff competition from Intel INTC is likely to lead to pricing pressure and dampen profitability at least in the near term.
In May, Intel launched the latest 10th Gen Intel Core vPro processors to support the remote work requirements of business enterprises. The i5 variant of the processors feature 4 cores with 8 threads while the i7 variant offers 4/6 cores with 8/12 threads. They also come with Wi-Fi 6 (Gig+) integration for enhanced connectivity.
Moreover, the company introduced the 10th Gen Intel Core S-series desktop processors in April to deliver next-gen gaming experience. This includes Intel’s flagship Core i9-10900K processor which features up to 10 cores with 20 threads and DDR4-2933 memory. Moreover, Intel Thermal Velocity Boost features allow speeds to reach up to a maximum of 5.3GHz.
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