What: Shares of Advanced Micro Devices (NASDAQ:AMD) rose 28.7% in May 2016, according to data from S&P Global Market Intelligence. Building further on a fantastic April surge, AMD shares have now soared 82% higher in just three months.
So what: The April pop's driver was pretty obvious, as AMD released a strong earnings report in that month. May didn't have any single nitro-powered growth event. Instead, AMD's rise rested on a couple of smaller pops across the second half of the month.
First, the company announced that its upcoming Polaris graphics platform would be unveiled on June 1. That was a welcome response to recent platform updates from graphics rival NVIDIA (NASDAQ:NVDA), showing that AMD just might have what it takes to stay relevant in this important and rapidly changing market.
Then, a new consortium was formed to promote industry standards for accelerated computing in data center environments. The Murderers' Row of IT heavyweights included AMD but neither NVIDIA nor Intel (NASDAQ:INTC). This move could give AMD a leg up on its largest rivals when consortium members look for number-crunching hardware under the developing Cache Coherent Interconnect for Accelerators (CCIX) standard.
Finally, AMD introduced a new line of graphics processors for high-density blade servers. Designed specifically for virtual computing and virtualized server builds, the FirePro S7100X fills number-crunching needs that are poorly met by AMD's traditional Opteron line of server chips.
Now what: The storied NVIDIA rivalry is heating up again, with both companies rolling out brand-new graphics architectures as we speak. Their next quarterly reports will let us know whether AMD's Polaris or NVIDIA's Pascal better meets the needs of clients in supercomputing and big data analysis. In the meantime, keep an eye on head-to-head comparisons between the two in the hardware enthusiast press.
The summer of 2016 is a pivot point for both of these stocks, as their finest graphics efforts do battle in the open market. The winner is poised to dominate the growing niche for data analysis hardware at a hockey-stick growth moment for that macro trend. If the difference is large, the loser is doomed to long-term irrelevance. Otherwise, we could be looking at two co-winners here.
There is not yet enough data to compute the final outcome. Stay tuned for the next couple of quarterly reports from AMD and NVIDIA, which will indicate the true direction of the market winds.