During the second quarter of 2014, Advanced Micro Devices (AMD -5.78%) claimed a roughly 40% unit share of the graphics card market, with rival NVIDIA (NVDA -3.87%) leading the market with a 60% share. While AMD was behind NVIDIA by a considerable margin, the company was still in decent shape, and its market share had been flattish for years. AMD wasn't gaining any ground, but it wasn't really losing ground either.

Things changed in September 2014, when NVIDIA launched its GTX 980 and GTX 970 graphics cards. AMD was forced to slash prices on its existing lineup, and a new product launch for AMD turned out to be about nine months away. For four quarters in a row, NVIDIA notched significant gains in market share, and by the second quarter of 2015, toward the end of which AMD finally launched a new lineup of products, AMD's unit market share had cratered to just 18%.

During the third quarter of this year, thanks to those new products, AMD's share finally stopped falling. In fact, the company gained a bit of market share during the third quarter, according to Jon Peddie Research, claiming 18.8% of the market. This is still down substantially year over year, but it's the first improvement AMD has shown in over a year.

Data from Jon Peddie Research.

Unfortunately for AMD, the company's core problems haven't gone away. AMD is still posting big losses, with its computing and graphics segment, which contains both PC CPUs and GPUs, continuing to deteriorate. Even after killing off various extraneous initiatives, AMD still has too many balls in the air, attempting to compete against Intel and NVIDIA simultaneously with extremely limited resources.

Along with its latest earnings report, AMD announced that it was selling off its assembly and test facilities into a joint venture, a move that will raise $320 million in cash and prevent the company from falling below its minimum cash balance target. This gives AMD more breathing room as it looks to launch new CPUs based on its Zen architecture next year, but at the rate that AMD is currently burning through cash, this infusion won't last long. During the past 12 months, AMD's free cash flow has been a loss of $260 million.

At the end of the second quarter, AMD launched brand-new high-end graphics cards, the Fury and the Fury X, as well as a broader line of cards, the 300 series, which are rebranded versions of the previous 200 series. The Fury cards contained high-bandwidth memory, something that NVIDIA cards lack, and this was supposed to give AMD an edge. It didn't; the Fury X performed about the same as NVIDIA's high-end GTX 980 Ti for the same price.

Meanwhile, the 300 series cards didn't offer anything new, other than slightly better performance than the 200 series cards on which they're based. NVIDIA's cards have continued to sell well despite AMD's launch, with the company's gaming revenue surging 44% year over year during the third quarter, driven by both an increase in volume and a shift toward higher-end graphics cards.

According to Steam's hardware and software survey, NVIDIA's GTX 970, a $300 graphics card that's now more than a year old, continues to grow as a percentage of Steam's user base. In October, 4.45% of surveyed Steam users owned a GTX 970, up from 3.97% in August and 3.45% in June. For comparison, the entire AMD Radeon 200 series accounted for just 1.32% of users in October.

AMD is no longer leapfrogging over NVIDIA with new graphics-cards releases. Instead, it's playing catch-up, and while the company was able to halt its market-share decline during the third quarter with new products, it looks like these products won't be enough for the company to regain a significant chunk of the market share that it's lost over the past year.