AMD and NVIDIA’s race in the stock market

NVIDIA (NASDAQ:NVDA) and AMD (NASDAQ:AMD), giants in the market of graphics accelerators and cards, met in another fierce battle. AMD Radeon RX 7800 XT and RX 7700 XT graphics cards will enter the market this month, ready to go head-to-head with NVIDIA’s RTX 4070 and RTX 4060 Ti 16 GB accelerators, respectively. Eager to compete with the upcoming AMD offerings, NVIDIA has preemptively slashed the prices of its accelerators. 

NVIDIA and AMD’s rivalry is one of the hottest topics in technology today. Both firms produce graphics processing units (GPU) as well as other computer hardware, each boasting unique characteristics and benefits.

NVIDIA is known for producing high-performance gaming and graphics cards that meet today’s demanding gaming environments, including computers and consoles. NVIDIA also produces machine learning/artificial intelligence chips used in various applications across different fields.

AMD excels at desktop and laptop processors as well as gaming graphics cards for PCs and laptops, featuring its Ryzen processors with unparalleled performance-to-price ratio, making them highly appealing to users looking for balance between cost and quality.

NVIDIA and AMD have long engaged in an intense rivalry, upgrading products and technologies while striving for greater market presence across different fields. NVIDIA remains dominant in gaming graphics card sales thanks to its powerful GPUs and collaborations with major game publishers; AMD expands their processor lineups and graphics cards which pose competition to NVIDIA supremacy on desktop and laptop markets.

Let’s examine the dynamics of the central server processors market. Supplies have increased by 18% to 7.2 million units shipped, yet have still failed to match up with last year when 9 million processors were shipped out. Statistics reveal that AMD achieved its maximum market share of 19% during fourth quarter 2016.

However, as of the end of July, NVIDIA concluded the second quarter of fiscal year 2024 with an impressive accomplishment. The company reported a staggering 101% increase in revenue, reaching $13.51 billion. Following the trading session’s closure, NVIDIA shares surged by 6.58%.

NVIDIA reported record Q2 23 net and operating income that increased nearly 10-fold year-on-year to reach $6.19 billion, surpassing both of their estimated annual operating expenses (of just 10% more this time around) to reach an incredible total of 6.8 billion, pushing their profit margin from 43.5% last year up to 70.1%. NVIDIA representatives noted this improvement could partly be attributed to having had to write off $1.34 billion due to excess inventory this past year.

Before the publication of the quarterly report, NVIDIA shares experienced a substantial uptick. After the release of Q2 23’s earnings results, trading sessions saw an initial rise in stock price by 0.1% before closing and subsequent drops by 0.63%.

NVIDIA shares have seen impressive gains of 220% since January and now have an estimated market capitalization exceeding $1 trillion.

NVIDIA has steadily seen their market share decrease from 84% to 80% since 2014 while AMD increased from 12% to 17% during this time.

Substantively, discrete desktop GPU shipments increased by 2.9% YOY to total 6.44 million units shipped; yet this represents a 36% drop when compared with last year’s approximate 10 million unit figure shipped.
Intel (NASDAQ:INTC), considered one of the newcomers in this market segment, has managed to hold onto their share in desktop discrete graphics market over time despite only entering it at 2%; they even doubled this percentage during Q1 2019.

AMD is confident in the release of new graphics cards like never before. These cards will be priced below $500, targeting a segment presently dominated by NVIDIA’s GeForce RTX 4060 series. At the same time, the RX 7800 XT model is supposed to compete with the GeForce RTX 4070 in the $600 and above price range, though prices have begun to dip. However, not all major AMD partners will be prepared to launch these new products on September 6.

Recent reports indicate that in the second fiscal quarter, NVIDIA received a notice from the U.S. authorities, urging the issuance of special export licenses for the supply of computing accelerators to specific Middle Eastern countries. China imposed these regulations since autumn 2016, although representatives from the U.S. Department of Commerce declined to provide commentary about this new restrictions imposed upon individual companies’ activities; NVIDIA and AMD representatives are yet to give an official response in regards to this development.

In general, despite being opponents, companies move pretty much the same way. It’s all about the sector they occupy. Any fundamental fluctuations will affect them both. The news background can be easily tracked in the economic calendar, facilitating comparison of events with fluctuations in stock prices.

Thus, the competition between NVIDIA and AMD remains an essential part of the global technology industry, and both companies continue to work on improving their products and technologies to meet the needs of their customers and maintain market leadership.

Richard Maxwell

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