After launching the second generation of its Ryzen PC CPUs earlier this year, Advanced Micro Devices (NASDAQ:AMD) teased more new products at Computex 2018 earlier this month. AMD is trying to win market share from Intel (NASDAQ:INTC) in both the PC and server CPU markets, and new iterations of its Threadripper and EPYC chips represent the next step in that plan.

Doubling down on Threadripper

AMD launched the first generation of its ultra-high-end Threadripper desktop processors last year. Those chips featured as many as 16 cores and were priced as high as $999, offering more cores for less money than comparable Intel products.

The AMD Ryzen Threadripper logo.

Image source: AMD.

The company announced the second generation of Threadripper at Computex, doubling down on its many-core strategy. The new Threadripper chips, expected to launch in the third quarter, increase the max core count to 32. Pricing wasn't announced, but I'd expect AMD to be aggressive.

Intel unveiled its own many-core monster at Computex, a 28-core chip set to ship later this year. But as Tom's Hardware notes, pricing this chip too low could cannibalize Intel's high-margin server chip sales. AMD doesn't have a massively profitable data center business to protect, so I'd wager that the second-generation Threadripper chips will be more affordable than Intel's offering.

Prior to Threadripper, AMD had been absent from the ultra-high-end market for a long time. If the company can build up a reputation for providing solid value and performance, and undercutting Intel on price, it could win some converts in this lucrative portion of the market.

EPYC progress

Along with trying to win market share in the PC CPU market, AMD is also trying to wrestle away share from Intel in the server CPU market. The company's EPYC chips are the centerpiece of this effort. Progress has been slow (not surprising given that it takes time for server OEMs to build systems around new chips). AMD aims to reach a mid-single-digit unit share by the end of the year, leaving Intel with the lion's share of the market.

AMD announced its second-generation EPYC processors at Computex, built on a 7-nanometer process. Code-named "Rome," these chips are expected to begin sampling to customers in the second half of 2018, with a full launch in 2019. Details beyond the basics were scarce.

These second-gen products will build on the success AMD has had so far getting EPYC chips into systems. Recent developments include Cisco's adoption of EPYC for its UCS server line, a new one-socket server from HP Enterprise aimed at virtualization and software-defined storage applications, and the availability of Tencent's EPYC-based SA1 cloud service offering.

Intel's main focus is its data center business, so AMD will certainly face an uphill battle as it tries to pick up more market share. But at the very least, AMD is on a path to become a meaningful player in the market once again.

Investors like what they see

Shares of AMD have surged so far this year, gaining about 46% year to date. Revenue is growing on the strength of new products, and the company has returned to profitability after years of drowning in red ink. AMD is executing well, but it's also benefiting from Intel's ongoing problems bringing 10-nanometer chips to market. Intel created an opening for AMD, and AMD is taking advantage.

With AMD stock now trading for around $15 per share, nearly 90 times adjusted earnings in 2017, the market is betting that profits will soar as these new products gain traction. High-end products like Threadripper and EPYC will certainly help the cause, although it's hard to say whether that will be enough to justify the valuation.

Timothy Green owns shares of CSCO. The Motley Fool owns shares of and recommends TCEHY. The Motley Fool has a disclosure policy.