AMD, whose share price nearly doubled in 2020, seems to have enough momentum to replicate its performance in 2021.
According to the research data analyzed and published by Finaria, the company’s share price shot up by 99.98% in 2020. As of January 21, 2021, it is up by 72.56% year-to-date (YTD) and is trading at $89.10.
Based on Wedbush Securities analysis, AMD stock could rise to $110 by the end of 2021. The stock ranks second out of 31 stocks on the IBD Electronics-Semiconductor Fabless Industry group. Intel ranks 23rd on the same index. According to the IBD stock checkup tool, it has a composite rating of 98 out of 99, compared to Intel’s 43 out of 99.
Among the factors contributing to its growth in 2020 were strong market share gains in the CPU space, against rival Intel. A study by Mercury Research states that AMD closed Q3 2020 with a 22.4% share of the CPU market. Compared to the prior year period, that marked an increase of 6.3 percentage points. It was the company’s highest share of the market since Q4 2007.
As of November 2020, it held 26.51% of the CPU market for Steam users, according to Steam Hardware Survey. That marked a 6% increase year-over-year (YoY), as Intel’s market share dropped by a similar percentage to 73.49%. The performance of the recently released Ryzen 5000 desktop processors well illustrates AMD’s strides over Intel in the CPU sector.
For instance, in the German market, data from MindFactory shows that AMD sold 40,000 processors in December 2020. The figure rose from 35,000 in the previous month.
AMD’s Market Share of x86 CPU Market Set to Rise to 50% in 2021
AMD’s recently launched Ryzen 5000 is a 7nm series of processors. By 2022, AMD is expecting to make the jump to a 5nm processor under Zen 4 architecture.
Intel’s 7nm processor is set to arrive in the market in 2023. The company is still planning to launch another 14nm processor – the 11th Gen Rocket Lake, scheduled to land at the end of March 2021. The launch of its 10nm desktop chip which was expected to compete with AMD’s 7nm has had substantial delays.
According to Rosenblatt Securities analysis, AMD could boost its market share of the x86 CPU to as high as 50% in 2021. That would be more than double its position at the end of Q3 2020.
In 2020, AMD PC sales totaled 300 million – including notebooks, desktops and Chromebooks. That was the highest number on record since 2014.
During CES 2021, AMD CEO projected that in 2021, notebook PCs designed with AMD chips would increase by 50%. To a large extent, the new Ryzen 5000 series processors are expected to fuel the growth. The company expects over 150 PCs running the new processor, with the first ones set to come out in February 2021.
Based on analyst estimates published by Yahoo Finance, AMD’s revenue is forecast to grow by nearly 27% in fiscal 2021. Its earnings per share are projected to shoot up 48%.
AMD Server Market Share to Grow to 20% in 2021
Thanks to the company’s strong sales in the gaming hardware segment and high server processor sales, the AMD semi-custom business is also expected to grow. In Q3 2020, the segment’s revenue nearly doubled, rising 116% YoY to reach $1.13 billion.
On the gaming side of things, AMD is powering Xbox Series X consoles from Microsoft and Sony’s Playstation 5 (PS5). In just four weeks after its launch, the Sony PS 5 sold a staggering 3.4 million units according to DigiTimes. That was the highest ever sales figure for any PS console. It was particularly remarkable seeing as stocks were limited and the consoles did not roll out globally as expected. Sony expects to sell between 16.8 and 18.1 million PS5 units in 2021 based on its production estimates for the year.
Beyond the gaming space, AMD’s gains in the server market are also expected to drive growth in the semi-custom business. In Q3 2020, revenue from servers running on AMD processors grew by 112.4% YoY according to IDC. It outperformed the broader market whose revenue growth was at 2.2%.
According to Mercury Research, Intel has the lion’s share of this market, at 93.4%. DigiTimes however projects that by the end of 2021, AMD will have grown its market share to 20%.
Lastly, AMD is planning to launch the third generation of Epyc server processors, codenamed Milan, later in Q1 2021.