Top Analyst Boils Down NVIDIA Corporation’s (NVDA) Key Advantage Over Advanced Micro Devices, Inc. (AMD) in Market Share Leadership
In a competition of chip makers, how do giants NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD) fare when sized up against each other? Top analyst Mitch Steves at RBC Capital recently conducted a cryptocurrency “thought experiment,” evaluating the computing power of the giants in terms of Bitcoin and Ethereum mining technology. The verdict? Nvidia’s last year model GPU “GTX 1070” in fact beats Advanced Micro Devices’ newer “Radeon 580” on a performance playing ground.
As such, the analyst reiterates an Outperform rating on shares of NVDA with a $150 price target, which represents a 1% downside from where the stock is currently trading.
When considering transitioning to conditions for creating a full-fledged Data Center, the analyst places extra emphasis on electrical costs in terms of Bitcoin, giving older Nvidia GPUs the upper hand over AMD in a 12-month period.
Recognizing higher demand for power efficiency, the analyst gives NVDA the leverage in the chip giant ring, noting that, “Choosing between Nvidia and AMD GPUs today is heavily dependent on price.”
Steves surmises, “Increasing workloads cause more demanding power consumption (data center vs. high performance desktop) which emphasizes the importance of long-term power efficiency. While small scale tasks such as mining Ethereum will decrease the importance of electrical costs, Data Center level workloads are less forgiving. Importantly, despite comparing an older Nvidia product (GTX 1070) to a newer AMD product (Radeon Rx 580) we found that Nvidia’s product allows for more performance when adjusted for electrical costs. Overall, while the focus has been around the Cuda software and higher performance of Nvidia chips (on a like for like basis), we think the power consumption aspect acts as another material reason for Nvidia to maintain its market share leadership position.”
Mitch Steves has a very good TipRanks score with an 89% success rate and a high ranking of #71 out of 4,569 analysts. Steves garners 31.8% in his annual returns. When recommending NVDA, Steves realizes 68.7% in average profits on the stock.