AMD Stock Rises on New Graphics Card Release


  • Shares of Advanced Micro Devices (AMD) popped higher due to a new product announcement.
  • The company released its latest RX 7900 series of GPUs to compete against its key rival.
  • AMD stock likely bounced higher on the underlying value proposition.
AMD stock - AMD Stock Rises on New Graphics Card Release

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Though video game enthusiasts must often pay substantial premiums to acquire the greatest in hardware, Advanced Micro Devices (NASDAQ:AMD) recently announced the launch of its Radeon RX 7900 series of graphics processing units (GPUs). While the debut falls a bit short of the ultimate performance benchmark Nvidia (NASDAQ:NVDA), AMD offers incredible value. As a result, AMD stock gained almost 2% heading into the afternoon session.

Under the hood, Advanced Micro Devices launched two GPUs: RX 7900 XT (priced at $899 retail) and RX 7900 XTX ($999). Both Radeon GPUs feature a 5 nanometer (nm) process on the graphics compute die and a 6 nm process on the memory side, according to The Verge. Essentially, this architecture enables interconnectivity, facilitating a more efficient GPU that improves performance without overly consuming energy.

On the convenience front, Advanced Micro recommends an 800-watt power supply for the premium XTX. That’s slightly down from the 850-watt recommendation of the predecessor model. For the XT, the recommended power supply sits at 750 watts. Both feature a small and convenient profile compared to Nvidia’s flagship RTX 4080.

To be fair, the RX series still lags Nvidia in performance in terms of ray tracing or a rendering technique that produces highly realistic lighting effects. However, if gamers don’t prioritize this particular innovation, the RX 7900 generates incredible performance at lower cost. Therefore, the underlying value position of AMD stock effectively split the technological difference, providing gamers with a competent, cheaper alternative.

AMD Stock Benefits From Price and Supply

On paper, the RX 7900 sits $200 cheaper than Nvidia’s RTX 4080, which will likely make customers think twice. For gaming professionals who absolutely need the best in sector technology, no substitute exists for Nvidia’s flagship. However, such specialists in the field represent a rarity. For the slightly less hardcore gamer, the RX 7900 is more than enough, thus benefitting AMD stock.

In addition, the comparison above compares retail price to retail price. However, because of supply chain disruptions and inflation, the actual price for Nvidia’s GPU could be much higher. Therefore, going the Nvidia route may be more onerous than it looks on paper.

Even more favorable for AMD stock, the underlying company reportedly has more than 200,000 RX 7900 series cards available for launch. By logical deduction, consumers may not have to deal with much price inflation regarding these new GPUs. Naturally, the gulf in price between AMD and Nvidia chips could become untenable for anyone but dedicated pros.

Finally, consumers must be extra careful regarding their discretionary expenditures. As executives from Walmart (NYSE:WMT) mentioned, even wealthier customers are feeling the pinch of inflation. Again, with Advanced Micro Devices splitting the difference, the holistic advantages appear to strongly favor AMD stock.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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