AMD (NYSE:AMD) has begun shipping its new Bulldozer chips for servers in an attempt to regain its lost server market share from Intel (NASDAQ:INTC). AMD is shipping its 16-core Opteron microprocessors based on Bulldozer architecture. [1] We can expect AMD to regain some server market share with these new chips. But the question is how soon?
The initial shipments are meant for some super-computer installations, therefore the impact in the 3rd quarter may not be material. However going forward we may start seeing some impact in Q4 of 2011. AMD has claimed that the new processor will provide 50% more throughput while consuming similar power levels compared to its predecessors. [2]
AMD really needs to make a dent in Intel’s server kingdom. The company has fallen from its peak share of about 25% in 2006 to just around 6% to 7%. Based on our expectations, we estimate that servers business constitutes about 22% to AMD’s stock. There is still a lot of room for growth.
You can modify our forecast above to see how a higher gain in server market share can impact AMD.
Our price estimate for AMD stands at near $10, implying a premium of close to 50% to the market price.
See our complete analysis for AMD’s stock.
Notes:- AMD Ships First ‘Bulldozer’ Opteron Server Chips, AMD Press Release, Sept 7 2011 [↩]
- AMD Ships First ‘Bulldozer’ Opteron Server Chips, eWeek.com, Sept 7 2011 [↩]
