Advanced Micro Devices, Inc. (NYSE:AMD) seems to want a slice of both Intel and Nvidia’s pie. The only question is, does AMD have the means to pull it off?
The company recently launched its new product line of GPUs focused on virtualization for workstations and diskless thin clients. The new range of hardware mirrors the release of the Firepro models in early August.
The new Firepro S7000 and S9000 will be using virtualization technology from various parties to deliver powerful GPU processing to workstation clients. While this is a good move on AMD’s part, they may be dealt a nasty blow when Nvidia Corp. (NASDAQ:NVDA) pushes its VGX dedicated GPU units on the market.
The VGX, a product of Nvidia and VMWare, was previewed during VMWorld 2012 last weekend. The advantage Nvidia may potentially have over the Firepro models is their more dedicated approach to the task. While the Firepro virtualization models are practically rebranded for VM use, the VGX is a compound solution that will probably outperform AMD’s cards.
One advantage AMD has in this case is that their product is already available and its pricing will almost certainly be more attractive than that of the VGX. At the same time, the VGX is developed together with VMWare while AMD speaks of the “potential” application of its hardware through VMWare, which may discourage early adopters.
The news of the virtualization models of Firepro GPUs didn’t really help AMD stock much. Brokers Sterne Agee lowered their price target for AMD from $7 to $6 yesterday. Short interest in AMD has been growing too, with a 9% increase over the last two reporting periods.
[BANNER]With AMD neglecting server CPUs and losing their obvious performance advantage in the sector and their slow advance in the field of mobile chips, the company is facing some hard times ahead. Yesterday’s close at $3.85 is their lowest in a little more than 3 years.
Hopefully AMD’s Piledriver and Steamroller will outperform Intel the way older AMD chips did and the company will be able to fully develop its mostly successful laptop APUs. Otherwise Mr. Rory Read will have a really hard time living up to his image of the new savior of AMD.
