Shares of Advanced Micro Devices (AMD -2.69%) have been on a tear this year, and the chipmaker's latest quarterly results only helped propel it to new highs.

AMD Chart

Data by YCharts.

AMD's outlook indicates that its rally may not be over just yet, and the company's growing clout in the graphics card market will be one of the catalysts contributing to its growth. AMD has made solid inroads into rival NVIDIA's (NVDA -2.61%) sandbox this year thanks to the launch of improved graphics processing units (GPUs) in 2019.

The company eclipsed NVIDIA in terms of pricing and performance last year when it launched its Navi-based RX 5700 and RX 5700 XT graphics cards. Those cards have played an important role in helping AMD corner a bigger share of the discrete graphics card market in the first quarter of 2020. And the latest data from the German retailer Mindfactory indicates that AMD may have kept up the pressure on NVIDIA in the second quarter as well.

AMD is holding its ground impressively against NVIDIA

Based on Mindfactory's sales data, graphics cards sales statistics compiled by indicate that AMD's Radeon RX 5700 XT graphics card gave the NVIDIA RTX 2070 Super a run for its money. The AMD card shipped close to 9,800 units in the second quarter, while the 2070 Super shipped just over 11,700 units.

What's interesting to note is that the 5700 XT graphics card is about 25% cheaper than the 2070 Super, but it comes close in terms of performance. Third-party benchmarks tell us that the 2070 Super is just 5% to 7% faster than the 5700 XT on average, which makes the latter a better value proposition for anyone looking to game at 1080p or 1440p resolutions.

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Meanwhile, NVIDIA's similarly priced RTX 2060 Super is slightly slower than the RX 5700 XT, which tilts the price-to-performance ratio in AMD's favor. This advantage translates into sales as well: Mindfactory's 5700 XT shipments in the second quarter outperformed the 3,920 units of the 2060 Super.

Now, Mindfactory's data has its limitations, as it represents sales from just one retailer. For instance, AMD GPUs made up nearly 42% of Mindfactory's first-quarter sales and NVIDIA accounted for the rest. But the first-quarter discrete GPU report from Jon Peddie Research gave AMD around 31% market share with NVIDIA again claiming the remainder.

So it would be wise to take Mindfactory's data with a pinch of salt, because it is just one slice of a much bigger market. But at the same time, it does indicate that AMD could be making further inroads into a space that has long been dominated by NVIDIA.

Will the trend continue?

The RX 5700 and the RX 5700 XT graphics cards are based on the RDNA microarchitecture that delivered a 50% improvement in performance per watt over its predecessor, the Graphics Core Next (GCN) microarchitecture. This enabled AMD to release powerful graphics cards at aggressive prices.

The good news for AMD investors is that the company is looking to push the envelope further this year with the RDNA2 architecture, which promises another 50% improvement in performance per watt. The grapevine suggests that AMD's next-generation graphics cards could be 1.95 to 2.25 times faster than the 5700 XT.

The chipmaker says that it is on track to launch its next-generation cards by the end of the year. If AMD is able to deliver the gains it is promising and manages to price the new cards attractively, it could give NVIDIA's upcoming Ampere GPUs -- which are also promising impressive gains -- a tough fight, allowing AMD to corner more of the video game hardware market for itself. After an incredible five-year run, don't be surprised if AMD remains a top growth stock going forward.