The world as AMD knows is gone. It is the latest perception owing to the speculations that AMD is losing its footing in the tech market. There are even rumors coming out implying that AMD lags behind NVIDIA and Intel.
Despite the claims regarding AMD and its prestigious devices, everything remains to be seen. However, it is a possibility that the competition will be fiercer this time around. As for the public losing its trust towards AMD, that remains to be confirmed.
It appears that the speculation spawned when AMD shares fell. Advanced Micro Devices' (AMD) shares fell 24 percent to around $10 in just one day, after rising almost threefold in one year and the company's fiscal 2Q17 guidance failed to meet investors' high expectations.
According to the report, Macquarie Group, Goldman Sachs, and Citigroup downgraded AMD's stock over concerns that revenue growth may not convert into higher profits and Macquarie analyst Srini Pajjuri lowered the price target for AMD from $14 to $10 as he believes that AMD may have a tough time improving its margin if Intel resorts to price cuts.
Intel and NVIDIA operate at 60 percent gross margins, giving them ample room to make aggressive price cuts without hurting their margins significantly. AMD operates at a 34 percent gross margin and has little room for any price cuts without impacting its margins, as noted by the same post.
On the other hand, AMD has released its price list. Tom's Hardware shared that AMD recently breathed new life into its microprocessor business with the release of its Ryzen CPU architecture, which is significantly faster than the company's older Bulldozer, Piledriver, and Kaveri based processors.
While Ryzen occupies the high-end of the CPU market, AMD still produces APUs and CPUs based on its older microarchitecture designs to handle the low-end, according to the same post. For the tech enthusiasts, every speculation linking AMD, Intel and NVIDIA should be taken with a grain of salt in mind.