Advanced Micro Devices (AMD, Financial) has been struggling to cope with competitive pressure from the likes of NVIDIA (NVDA, Financial) and Intel (INTC). However, it finally looks like there may be light at the end of the tunnel for AMD investors.
Advanced Micro Devices recently shared a presentation at the 2016 Game Developer Conference. The company publicized its latest improvements in software and hardware to have a strong hold in the market of virtual reality, and also revealed its new GPU specialized program that streamlines implementation of virtual reality technology for developers and customers.
The company is focused on converting virtual reality to be easily manageable for developers and customers with the help of its GPU specialized program highlighting the new “Radeon Virtual Reality Ready Premium” and “Radeon Virtual Reality Ready Creator” levels. The company's upcoming Polaris GPU architecture and an amazing Liquid virtual reality technology will improve trailblazing VR-optimized graphics at the same time.
According to a recent research, AMD is powering a majority of home entertainment virtual reality systems globally with an estimated 80% market share. This is mainly due to the company’s technology driving virtual reality game consoles. Moreover, AMD is making deals with the HTC Vive and Oculus Rift pre headset makers to promote the Radeon ecosystem to take benefit of these powerful and amazing devices.
Apart from this, Advanced Micro Devices is also working with Sulon Technologies on the Sulon Q to power its LiquidVR technology for smooth and receptive AR and VR experiences.
A bright spot
Throughout the past few years, the company has been losing market share in the GPU and CPU market, but the only positive section for the company has been its semi-custom business, which presently consists of SoCs that are used in major game consoles. .
It is very difficult for the company to diversify the semi-custom business beyond game consoles, but additional revenue gained this year may help solve the problem. It is still not clear whether the company’s chips will be used in the next generation of consoles, and misstating that revenue will move the company downward at a rapid pace. In 2015, the company’s semi-custom segment produced $215 million of operating profit, making it the most lucrative segment of the company.
Conclusion
AMD investors may have had troubled times in the past, but the future is looking better. All the negative news is already priced in the stock and the risk/reward ratio is favorable for long-term investors. Hence, investors can breath a sigh of relief and continue holding AMD.
