AMD (AMD 25.32, +1.34, +5.59%) opened 4% higher after unveiling its
newest GPU for data centers.
AMD announced yesterday that its Dual-Vega Radeon Pro V340 card with 32 GB memory will be available in the fourth quarter. The company has yet to announce the selling price of the new GPU.
It is worth noting that AMD's latest product is not meant to compete with NVIDIA's (NVDA) RTX series GPUs that were announced last week. Instead, the AMD card is a rival to NVIDIA's Tesla P40, which has been on the market for more than a year. AMD claims the new card can support 33% more virtual machines than the competing card from NVIDIA.
Although the pricing of the graphics card has not been announced yet, AMD has a history of launching products that offer modestly lower performance than competing products from NVIDIA, but at a lower price, thus appealing to users looking for value.
Last week, NVIDIA announced a new line of GPUs that offer ray-tracing technology. The cards, which will be available for sale in late September, will command a higher a price than the previous line of GTX 1000 GPUs. AMD will undoubtedly offer a competing product at some point in the near future, and once again, pricing is likely to be a differentiating factor.
AMD's share price more than doubled in 2018, lifting the stock to levels last seen in late 2016. The stock currently trades at a trailing price/earnings ratio of 74.9x versus NVIDIA's 39.7x. On a forward basis, AMD's price/earnings ratio checks in at 41.9x versus 35.2x for NVIDIA.
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