Credit: Shutterstock photoOnce near death, Advanced Micro Devices (AMD) has come back roaring hotter than ever, thanks to the explosion of things needing GPUs (Graphics Processing Units). This trend seems likely to continue for years, boding well for Nvidia (NVDA) as well.
AMD reported fourth-quarter results, losing a penny per share on $1.11 billion in revenue. Analysts were expecting a penny per share loss and $1.07 billion.
More important the results were CEO Lisa Su's comments about 2017 and the trend of GPU's into areas like gaming PCs, artificial intelligence, autonomous driving, virtual and augmented reality and more.
"“As we enter 2017, we are well positioned and on-track to deliver our strongest set of high-performance computing and graphics products in more than a decade," Su said.
When a company is confident that its current group of products are the strongest they've been in more than a decade, that's saying something. And it's not sitting on its laurels.
Its Zen CPUs and Vega GPUs are on track to be released later this year, which bodes well for AMD, given its history of over promising and under delivering.
The aforementioned trends -- driverless cars, VR/AR, gaming machines, machine learning -- are all in need of top-of-the-line computing power, needs that can only be met by GPUs. From voice assistants to search to e-commerce to photo recognition, it's everywhere. There's a reason why Nvidia was the best performing stock in the S&P 500 in 2016 and AMD shares rose more than four-fold.
Every facet of technology and area of business is increasingly being touched by machine learning.
Click to view original tweetComments like that from Andreessen Horowitz analyst Benedict Evans about the state of machine learning are extremely powerful.
Couple these trends with new announcements Nvidia made during CES (new partnerships, chips-as-a-service, etc.) and it's clear why investors are betting heavily on this sector and these two companies.
There's more -- way more -- room to run.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
