Nvidia Stock: NVDA wins over AMD in graphics chips. What this means.

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An Nvidia GeForce RTX 3080 Ti graphics processing unit.

Courtesy of Nvidia

Advanced Micro Devices has steadily grown its processor business to the detriment of

Intelligence

over the past few months. But the company’s graphics chips are a different story, and haven’t fared as well compared to the formidable technology developed by

Nvidia.

In a research note Tuesday night, BMO Capital Markets analyst Ambrish Srivastava said that Nvidia (ticker: NVDA) had taken a significant market share of

AMD

(AMD). Nvidia’s share of the graphics processing units, or GPUs, market was 81% in the quarter ended in March, up 5.2 percentage points from the same quarter a year earlier, Srivastava said. . AMD captured 19%. The analyst said the companies’ market shares have not changed substantially on a sequential basis.

AMD did not immediately respond to a request for comment.

Both stocks advanced in trading on Wednesday. AMD shares rose 1.4% to $ 81.96, while Nvidia climbed 2.9% to $ 669.62.

According to data from the BMO report, based on statistics from Mercury Research, the average price of graphics cards increased 10% sequentially in the first quarter, with total sales increasing 1%. Normally in the first quarter, sales decline; they fell 11% in 2020 over the same period.

It is not difficult to understand why prices are increasing and sales are stable. Like many other types of semiconductors, video game cards are scarce and demand is high. According to a report from March in The edge, consumers are willing to pay more than double the normal price for most of the newer graphics cards produced by AMD or Nvidia.

Cryptocurrency miners contribute to the high demand for GPUs. Figures included in BMO’s report include reused video game chips used to mine cryptocurrency and a new line of processors designed by Nvidia for crypto mining.

Nvidia

recently said it plans to report $ 400 million in revenue from crypto chips in its fiscal second quarter. It has adjusted the functionality of several of its other video game cards to make them less useful to minors.

It is not possible at this time to determine the exact number of GPUs sold for mining. But Mercury co-founder Dean McCarron said Barron Via email, it is possible to determine the maximum number of additional GPUs that could have been used to mine ethereum during the first quarter. Ethereum is a popular digital currency that people use GPUs to mine.

The maximum addition was the equivalent of 4.5 million GPUs, according to McCarron, while AMD and Nvidia sold nearly 22 million graphics chips in total during the quarter. Based on his data, McCarron said the actual crypto GPUs added to mining, including Nvidia’s custom chips, were closer to 1 million to 2 million GPUs, or less than half of the theoretically possible addition of 4.5 million.

AMD shares are down 11% this year, with Nvidia shares gaining 29%. The PHLX Semiconductor Index rose 14% during the same period.

Write to Max A. Cherney at max.cherney@barrons.com


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