AMD Is Headed To $8.40, Enhances Digital Display Industry With New Graphic Cards

AMD’s (NYSE:AMD) recent launch of its next generation FirePro graphic cards, refreshed with feature-rich content, addresses a growing need for large and dynamic screens that can be easily updated with new content. The existing FirePro product series of the company help the professional and gaming console graphics division contribute around 4% to our current price estimate for AMD. We believe, that AMD has the capability and abundant opportunity to expand its market share by the end of our forecast period and an addition to its FiroPro lineup is just a case-in-point for the same.

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AMD Introduces Next Generation FirePro Professional Graphic Cards

Digital signage has become an important and omnipresent part of our everyday lives. With the launch of its FirePro cards, AMD plays its part in enhancing the digital display wall industry by providing suppliers and developers with impressive display density, performance and superior value.

Though, it has a broad line up of its FirePro graphic cards, the newly launched FirePro W600 is AMD’s first professional graphic card to make use of the company’s 28-nanometer technology and the “Graphics Core Next” architecture. It is an ideal solution to power high-resolution, content-rich display walls; with one graphic card capable of powering up to six screens or displays. With the ability to drive multiple displays, deliver breakthrough 3D, video and interactive content, the FirePro W600 promises to deliver high performance and quality.

AMD’s display technology partnership with Mitsubishi Electric Europe allows the company to empower the latest cutting-edge technology. The thinner, lighter and increasingly cost-effective HD LED, LCD and plasma technologies makes multi-screen display walls attractive to a range of companies involved in advertising, entertainment, security and video-conferencing markets, among others.

AMD’s Standing In The Professional Graphics Market

AMD’s Professional GPU Market Share fell sharply from 18% in 2007 to about 12% in 2008, as Nvidia (NASDAQ:NVDA) gained a significant share during the same period with its broad product offering. However, backed by its FirePro series, AMD registered a significant growth with a 16% share of the professional GPU market in 2011.

We believe, that over a period of time AMD will compete on pricing and target emerging markets which are increasingly turning into design-based economies, moving ahead of just being manufacturers. Even though we expect Nvidia to retain its majority share of the professional graphics market, we estimate its share to come down marginally in future.

Given that AMD does not control even one-fifth of the market, it has plenty of opportunity to grow its share in this division. We forecast it accounting for around 19% of the market by the end of our review period.

Our price estimate of $8.39 for AMD is at a premium of above 40% to the current market price.

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