Advanced Micro Devices, Inc
.
AMD
recently announced the launch of the new 3000 C-Series Ryzen and Athlon mobile processors for Chromebooks, designed in collaboration with Alphabet’s
GOOGL
Google.
With the new processors, AMD rolled out the first-ever “Zen” architecture-powered Chromebooks. Moreover, systems from ASUS, Acer, HP Inc.
HPQ
and Lenovo, slated to release in fourth-quarter 2020 will leverage the new processors.
Markedly, per AMD’s estimates, new Ryzen mobile processors offer up to 212% enhanced performance for content creation and multitasking over the prior generation of AMD-powered Chromebooks. Also, the new processors, embedded with AMD Radeon Graphics, will aid users with almost 178% faster web browsing compared to that of the previous generation.
The base AMD Athlon Silver 3050C model features a core count of 2 with 4 threads, while the advanced AMD Ryzen 7 3700C model has a core count of 4 with 8 threads. The GPU core count for Athlon Silver 3050C model is 2, while that for Ryzen 7 3700C model is 10.
Further, AMD Ryzen 7 3700C processor offers superior performance for Chromebooks, offering up to 251% enhanced graphics performance, 104% faster office productivity performance and 152% improved photo editing performance over previous generation AMD Chromebooks, per the company’s estimates.
These robust features are expected to drive adoption of the Chromebooks, powered by new processors, which in turn is likely to bolster AMD’s brand reputation and instill investor optimism in the stock.
Notably, shares of AMD have returned 69.4% in the year-to-date period compared with the
industry
’s rise of 24.8%.
Stay-at-Home Push Favors Prospects
Surge in remote work trends stemming from the coronavirus pandemic is driving demand for faster and more responsive processors to boost business processes. Enterprises and professionals are looking to purchase systems that offer enhanced performance and security to meet the changing work environments.
As more people are being forced to stay indoors due to the coronavirus led shelter-in-place orders, there has been a rise in user engagement for browsing the web, multitasking, or streaming video. Moreover, the power-efficient 3000 C-Series mobile processors support thinner and lighter Chromebook designs, which are loaded with advanced Wi-Fi 6 and Bluetooth 5 capabilities for enhanced connectivity.
These factors are expected to lead to a significant improvement in uptake of new Chromebooks.
Further, the growing momentum of commercial laptops and Chromebooks, driven by work-from-home, online learning and gaming, is likely to positively impact laptop-makers which bodes well for the adoption of AMD’s processors that are designed specifically for workforce business productivity purposes. Per the
latest IDC report
, PC shipments were up 11.2% on a year-over-year basis to 72.3 million in second-quarter 2020.
In fact, AMD’s Ryzen 4000 G-Series Desktop processors have already been adopted by notable PC OEMs like HP, and Lenovo. 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 #3 (Hold). 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. These also come with Wi-Fi 6 (Gig+) integration for enhanced connectivity.
Also, NVIDIA’s acquisition of ARM Holdings, might aid the acquirer to provide full stack CPU-GPU offering, which poses a headwind for AMD.
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