Shares of microchip maker Advanced Micro Devices (NASDAQ:AMD) were roaring ahead 11.5% (as of 1:55 p.m. EDT) on the first trading day following the company's weekend appearance at the Computex trade show in Taipei.
At Computex, AMD announced its third generation of AMD Ryzen desktop processors, including what it called the "highest performance 12 core desktop processor ever," the Ryzen 9 3900X CPU.
Sketching out a lineup of five desktop processors, ranging from six to 12 cores with price tags from $199 (the Ryzen 5 3600 CPU) to $499 (the aforementioned Ryzen 9), AMD boasted that it's creating a "new [Radeon DNA] gaming architecture" that, in conjunction with "upcoming AMD Radeon [7-nanometer] RX 5700-series graphics cards ... will accelerate the future of PC, console, and cloud gaming."
Analysts who attended Computex said AMD's products simply stole the show, with Cowen & Co. predicting AMD will enjoy "above-consensus growth, share gains, margin expansion and ... share appreciation," and Wells Fargo opining that AMD seems to be offering "very compelling price points versus Intel Core i7/i9 processors."
This isn't news to investors, who have already bid up AMD stock by nearly 100% over the past 52 weeks. And yet, AMD's last quarterly earnings report showed a 23% decline in sales and an even worse 80% falloff in profits. If AMD is to justify the valuation of nearly 120 times earnings that its stock currently commands, these new chips had better prove every bit as popular as Wall Street says they will be.