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Semiconductor designer Advanced Micro Devices Inc (NASDAQ:AMD) is soaring to new highs on the open market after revealing earnings results for the second quarter of the fiscal year 2020 last month. AMD's manufacturing node edge in the central processing unit (CPU) market was attenuated last month when silicon behemoth Intel Corporation conceded defeat in the 7nm fabrication node and admitted that products manufactured on this node through its own facilities were facing delays.
AMD, which sells silicon fabricated by the Taiwan Semiconductor Manufacturing Corporation (TSMC), is currently selling products manufactured on the latter's 7nm node, whose fabrication parameters such as transistor density are different from Intel's products that are built and sold under the same branding.
Based on current market optimism about AMD, the company crossed $100 billion in market value or capitalization earlier today as it share price touched a new high of $85.80.
AMD Share Price Soars To All-Time High As Intel Delay, Price Targets Inject Market Optimism
The latest investment and research firm to express unbridled optimism about AMD's future is Jefferies. Analyst Mark Lipacis in a fresh note has informed investors that he believes that Intel's ball drop with 7nm represents deep-rooted challenges with chip fabrication, and based on this fact, he not only believes that AMD will extend its lead in the arena as we move ahead in time.
Additionally, the analyst also believes that the best-case market share that AMD can achieve in the chip arena will touch 50% in as early as twelve months. Subsequently, should AMD take a 50% market share, the company's earnings-per-share (EPS) as-per the analyst's calculation can touch $6.75.
In its second-quarter 2020, the company had posted $0.13 in diluted earnings per share, and therefore, Lipacis' best-case estimate expects astounding levels of growth that will be unprecedented in AMD's history.
Over the course of trading today, the chipmaker's shares have risen by more than 9% on the open market, as they crossed $84/share at noon Eastern Time. This marks for roughly 57% growth over-the-month, with the growth levels crossing those exhibited by the NASDAQ-100 stock index.
The company is set to launch Ryzen 400 desktop CPUs and Big Navi graphics processing units (GPUs) later this year. Ryzen 4000 is based on AMD's Zen 3 architecture and through it, the processors will improve their instructions-per-clock (IPC), overall clock counts and total cores. Big Navi, which will be based on the RDNA-2 architecture will enable products to improve performance-per-watt (PPW) by a staggering 50% according to unconfirmed reports.
AMD's near-peer semiconductor stocks including Intel Corporation and NVIDIA Corporation aren't doing as well on the open market today. Intel's 7nm woes have sapped analyst confidence from the stock, with Wall Street reducing price targets for the company across the board following its earnings report last month. NVIDIA, which is rumored to be in talks for acquiring British design house Arm is yet to report its earnings for the previous quarter.
In another important win for AMD, the company announced today that Cupertino tech giant Apple Inc's 27-inch iMac desktop computer had been upgraded with its Radeon Pro 5000 GPU lineup. Apple, which is known to play things quite close to the chest, had the silicon for its product built exclusively by AMD. The GPUs feature AMD's Navi architecture with users being able to choose from either of the Radeon Pro 5700 XT, Radeon Pro 5700, Radeon Pro 5500 XT or the Radeon Pro 5300 to cut down render times by as much a 55% and as low as 30% according to official statistics provided by Apple at today's product update.
However, while AMD has managed to convince Apple about the merits of its GPUs, the latter is still moving forward to replace Intel processors with those designed by Apple itself. Should this decision translate into high-end notebooks and products such as the iMac, then Apple will use TSMC-built chips for all of its products. Upcoming console launches from Microsoft Corporation and Sony Corporation will help AMD's revenues as well since they feature custom silicon designed and sold by the company.