AMD confirms Radeon RX 500 series Vega preview at Capsaicin & Cream event. AMD stock could gain big from this ahead of Ryzen launch. 

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Shares of Sunnyvale, California-based Advanced Micro Devices Inc (Nasdaq:AMD), up 587% in the last 12 months, continue to climb higher, mostly on investor speculations. The speculation has largely been around the next set of products to be launched by AMD, Ryzen series CPU and Vega GPUs. As the official launch of Ryzen series CPUs on March 2nd is getting closer, things are getting much more spiced up with a series of latest leaks about the Ryzen CPUs. In one of our previous posts, we had covered why initial Ryzen leaks suggest AMD stock is set to skyrocket with the Ryzen series launch. It has all been speculation for AMD in 2016 but 2017 could be different. Continuing on the speculation front, Vega GPUs, to be launched in May later this year could be one more reason to buy AMD stock. Here's Why.

The Big Deal.

AMD Radeon RX 500 Series Vega GPU will be previewed at the company's Capsaicin & Cream event, part of the GDC 2017 on Feb 28th. With its latest 14nm graphics architecture Vega, AMD has made the most incremental step forward in the last 5 years in terms of architecture tweaking. The latest leaks and reports about Vega GPUs suggest this could be the fastest GPU that the chipmaker has ever built and would give NVIDIA's (Nasdaq:NVDA) GTX 1080 GPU a run for its money. AMD had disclosed a host of new details about the Polaris graphics architecture RX 400 series (unreleased then) during its last year Capsaicin event in March, a similar thing about Vega GPUs cannot be rolled out. With Vega GPU leaks already suggesting impressive results, the latest Vega sneak-peek could potentially drive AMD stock much higher.

A recent Wccftech report states that "80% of AMD’s driver team is working right now on polishing Vega drivers". The reason behind this is that "the Radeon Technologies Group is devoting an extraordinary amount of attention and resources to making sure Vega drivers are on-point on day one. This is an effort, as bitsandchips.it explains, by the company to maintain the growing positive image it has created around its new software ecosystem." This effort really bodes well for AMD and this should result in rock solid stability and competitive performance from Vega GPUs on launch day. This is really a great news to AMD fans, in addition to already confirmed impressive Vega specifications.

A standout confirmed specification to quote is: "In terms of graphics horsepower, the Vega 10 powered MI25 accelerator is rated at a staggering 12.5 TFLOPS of single precision floating point compute and double that in half precision FP16 compute. That’s 1.5 TERAFLOPS more than NVIDIA’s Tesla P100 accelerator, powered by the monstrous 610mm² GP100 GPU." All such specifications increase the expectations ahead of the Feb 28th GDC event.

AMD Is Slowly Gaining Market Share In The GPU Market.

Jon Peddie Research publication results reported by Wccftech state that both NVIDIA and AMD saw an increase in GPU market share in Q4 2016 but Intel's (Nasdaq:INTC) market share declined. Though NVIDIA was the biggest gainer in the GPU market in Q4 2016 AMD saw higher GPU shipments than NVIDIA as "they also offer iGPUs on their APUs for desktops and notebooks". To quote AMD's results from the report:

"Their overall desktop discrete GPU shipments increased by 4.3% (vs 6.1% of NVIDIA) and  notebook  GPU shipments increased by 3.2% (vs 13.8% of NVIDIA). Their iGPU shipments  increased by 23.9% on  notebooks and 16.9% on notebooks which is the reason for the overall high GPU shipments. AMD didn’t  do as well as NVIDIA in the PC Gaming/Graphics market."

AMD 's performance in the PC Gaming/Graphics market could substantially change with the upcoming Vega GPUs. A fellow contributor on Amigobulls highlights the vision of AMD to be number one in graphics segment. AMD has identified Gaming as one of its growth opportunities with a total addressable market (TAM) of $15B. To capture this identified market, Vega GPU's will play a key role here. The Amigobulls post referred previously estimates annual revenues of nearly $5.3B from AMD's Gaming and Immersive platforms alone in 2017 against a total revenue of $4.27B in the last 4 quarters. Going by initial confirmed specs and response from enthusiasts, Vega GPUs could likely be one of the growth catalysts to drive AMD revenues.

Final Words: Vega Looks Set to Drive AMD In The Long Run.

The final details of Vega GPU are still not known. AMD is known for its competitive pricing strategy as it has been proven again with the latest Ryzen CPU price leaks. As the Ryzen leaks suggest, $1000 performance for the price of $349 from AMD, a similar thing can be expected in the case of Vega GPUs. Of late NVIDIA has also tried aggressively to go downmarket to kill competition from AMD but Vega has shown a lot of promise to match NVIDIA's GPU offerings on all fronts. If the final Vega product can deliver another 5-15% performance improvement over the demoed version, then AMD can gain big in the GPU market. Initial glimpses of Vega are very good, the latest preview should likely reaffirm this belief. AMD stock could climb higher after the Vega preview at GDC 2017. Vega is a likely to be a long-term growth driver for AMD stock.