Advanced Micro Devices, Inc. (AMD) Stock Will Ride High on Ryzen 3

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Advanced Micro Devices, Inc. (NASDAQ:AMD) is determined to keep up its fantastic 2017. A few days ago, the company posted a surprise Q2 profit, giving AMD stock a big shot in the arm. And now, it’s following that up with a pivotal product release.

Advanced Micro Devices, Inc. (AMD) Stock Will Ride High on Ryzen 3

Source: AMD

AMD has officially dropped its new Ryzen 3 processors — the budget-level CPUs aimed squarely at territory currently dominated by Intel Corporation’s (NASDAQ:INTC) Core i3.

AMD Releases Ryzen 3 Processors

AMD has been launching its new Ryzen series of processors — based on the company’s latest Zen architecture — through the year, starting with Ryzen 5 in March. On July 27, it was the Ryzen 3’s turn. AMD announced the new chips are now shipping:

“New Ryzen 3 CPUs Deliver Exceptional Responsiveness and Performance at Mainstream Pricing.”

AMD is offering two versions of its most affordable desktop PC processor, the $109 Ryzen 3 1200 and the $129 Ryzen 3 1300x. Both chips are aggressively priced compared to the competing Intel Core i3 series, and offer two advantages over the competition: four processing cores instead of two, and support for overclocking.

The $109 Ryzen 3 1200 competes with the Intel Core i3-7100 at $119, while the $129 Ryzen 3 1300x goes up against the Core i3-7350K at $149.

Ryzen 3 Sweet Spot: Budget PC Gamers

While the sales of computers continue to decline, PC gaming is on the rise. It’s estimated the PC gaming hardware market could hit the $30 billion level by next year, and carving out a bigger chunk of that market would be a big boost to AMD stock. It started with the Threadripper, a high-performance CPU aimed at the most demanding gamers.

After hitting the high end, AMD is aiming the Ryzen 3 series squarely at budget-conscious PC gamers.

While the Intel Core i3 is a dual-core CPU with an integrated GPU, the Ryzen 3 is quad-core and lacks the integrated GPU. The lack of graphics support sounds like a problem for Advanced Micro Devices, and it could be when it comes to entry-level general-purpose desktop PCs. But when it comes to gaming, an integrated GPU simply doesn’t cut it — a graphics card is required.

AMD is betting gamers will look at the savings of their CPU compared to the Intel Core i3, apply that to a video card and ditch Intel.

ExtremeTech performed benchmark tests with the latest AMD and Intel chips and came up with some interesting results that support that gaming push. In single-thread performance –which is the kind of computing a casual user might do on a daily basis — the Intel Core i3 chips outperform AMD. At this point the value equation (saving a few dollars at the cost of lower performance) isn’t exactly compelling.

But when it comes to multi-threaded tasks — applications like PC gaming– where the Ryzen 3’s quad-core architecture has the advantage, AMD easily beats the Intel Core i3. In fact, in some tests, the Ryzen 3 1300 comes within striking distance of an Intel Core i5-7500. That’s an entirely different class of CPU, with a $204.99 price tag.

Better performance and a lower cost makes for a much easier sell.

Bottom Line for AMD Stock

Next up for Advanced Micro Devices is the rollout of Ryzen mobile chips for the laptop market. They’ve already been shown off, and with an expected availability in the second half of 2017, it shouldn’t be long before they officially launch.

In the meantime, expect the Ryzen 3 to do its share to contribute to the yearlong resurgence in AMD stock.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015.


Article printed from InvestorPlace Media, https://investorplace.com/2017/07/advanced-micro-devices-inc-amd-stock-will-ride-high-on-ryzen-3/.

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