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Intel's (INTC) New GPUs Pose Threat to AMD's Market Share
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Intel Corporation (INTC - Free Report) recently re-entered the discrete graphics processing unit (GPU) market after a two-decade absence and captured 4% of the market in the third quarter of 2022, according to Jon Peddie Research (JPR), the industry's research firm for graphics.
Advanced Micro Devices (AMD - Free Report) and Nvidia currently dominate the discrete GPU market, with Nvidia controlling the higher-end market and AMD the lower-end market, per a report from The Motley Fool.
Intel's expansion into the discrete GPU market could potentially hinder AMD's long-term growth as Intel targets many of the same lower-end PC gamers.
Intel's Xe discrete GPUs are a new generation of graphics processors introduced in late 2020 and early 2021. These GPUs were designed to challenge AMD's Radeon and Nvidia's GeForce in the high-end PC gaming market. Also, these GPUs are produced by Taiwan Semiconductor Manufacturing and are built using a 7nm process.
According to recent industry benchmarks, Intel's Arc A380 GPU has proven to deliver better performance than AMD's Radeon RX 6400 across a wide range of games.
This is significant because the RX 6400 is more expensive than the A380, which retails for around $140, while Nvidia's comparable GTX 1630 costs about $200. Hence, this may make the A380 an attractive option for consumers looking for good performance at a lower price point.
Intel's market share of discrete GPUs has increased, which is concerning as the overall GPU market has declined 42% year on year to 14 million units in third-quarter 2022. This is due to a shrinking PC market, and Intel, AMD, and Nvidia are all competing for a decreasing market.
Intel designs and manufactures computer chips and other electronic components. Its products are used in a wide range of devices, including personal computers, servers and mobile devices.
For 2022, the company expects non-GAAP revenues to be $63-$64 billion, down from prior expectations of $65-$68 billion, owing to challenging macroeconomic conditions with high uncertainty. Non-GAAP earnings are expected to be $1.95 per share, down from prior expectations of $2.30.
At present, INTC carries a Zacks Rank #3 (Hold). The stock has lost 49.9% in the past year compared with the sub-industry’s decline of 43.7%.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 8.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 18.4% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.58 per share, rising 19.8% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 9.4%. Shares of SMCI have soared 83.6% in the past year.
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Intel's (INTC) New GPUs Pose Threat to AMD's Market Share
Intel Corporation (INTC - Free Report) recently re-entered the discrete graphics processing unit (GPU) market after a two-decade absence and captured 4% of the market in the third quarter of 2022, according to Jon Peddie Research (JPR), the industry's research firm for graphics.
Advanced Micro Devices (AMD - Free Report) and Nvidia currently dominate the discrete GPU market, with Nvidia controlling the higher-end market and AMD the lower-end market, per a report from The Motley Fool.
Intel's expansion into the discrete GPU market could potentially hinder AMD's long-term growth as Intel targets many of the same lower-end PC gamers.
Intel Corporation Price and Consensus
Intel Corporation price-consensus-chart | Intel Corporation Quote
Intel's Xe discrete GPUs are a new generation of graphics processors introduced in late 2020 and early 2021. These GPUs were designed to challenge AMD's Radeon and Nvidia's GeForce in the high-end PC gaming market. Also, these GPUs are produced by Taiwan Semiconductor Manufacturing and are built using a 7nm process.
According to recent industry benchmarks, Intel's Arc A380 GPU has proven to deliver better performance than AMD's Radeon RX 6400 across a wide range of games.
This is significant because the RX 6400 is more expensive than the A380, which retails for around $140, while Nvidia's comparable GTX 1630 costs about $200. Hence, this may make the A380 an attractive option for consumers looking for good performance at a lower price point.
Intel's market share of discrete GPUs has increased, which is concerning as the overall GPU market has declined 42% year on year to 14 million units in third-quarter 2022. This is due to a shrinking PC market, and Intel, AMD, and Nvidia are all competing for a decreasing market.
Intel designs and manufactures computer chips and other electronic components. Its products are used in a wide range of devices, including personal computers, servers and mobile devices.
For 2022, the company expects non-GAAP revenues to be $63-$64 billion, down from prior expectations of $65-$68 billion, owing to challenging macroeconomic conditions with high uncertainty. Non-GAAP earnings are expected to be $1.95 per share, down from prior expectations of $2.30.
At present, INTC carries a Zacks Rank #3 (Hold). The stock has lost 49.9% in the past year compared with the sub-industry’s decline of 43.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) and Super Micro Computer (SMCI - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 8.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 18.4% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $9.58 per share, rising 19.8% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 9.4%. Shares of SMCI have soared 83.6% in the past year.