AMD’s Zen launch will be its first major breakthrough since the Athlon 64 in 2004. In combination with several other products, it may give AMD the chance catch up with the competition next year. Not only that, but with the potential closure of the $320 million deal with Nantong-Fujitsu, it may have the cash to release its products sooner.
The Zen chip and its other new GPUs have already received excellent reviews and with the upcoming release of even more new products, such as the 14 NM chip Polaris, the good news keeps flowing.
However, the key is the release of the Zen chip planned for Q4 2016. Its advanced graphic solutions will give it a real comparative advantage over any of its other competitors in the market. This means for the first time in a while, its superior products in 2016 should increase its market value, and drive the stock closer to the target of $10 a share by 2017.
$320 Million in Cash
The negative cash flow of $226 million in 2015, mainly caused by negative PC sales and the struggle of 28NM to find its place on the desktop and laptop market has created issues. With the expected closure of the Nantong-Fujitsu deal worth $320 million in cash next quarter, this should reduce some of the pressure and give AMD options,
The virtual reality market is critical for AMD at the moment, with its expected growth from $600 million in 2015 to $5.1 billion this year. Already, even without its two new products, AMD dominates the VR market with an 83 percent market share. With its new product lines, AMD will continue to grow.
For this to be successful, the financial injection from the Nantong-Fujitsu deal must come soon. Even a relatively small increase in sales could have huge impact on AMD’s performance. AMD has already survived with less competitive products, and with the potential of the Zen and Polaris chips, its results could skyrocket, making the Nantong-Fujitsu deal vital for AMD at the moment.