AMD shifts strategy to challenge Nvidia in gaming GPU market
- AMD is shifting its focus to mainstream and mid-range GPUs to increase its market share in the gaming GPU sector.
- The company aims to capture 40%-50% of the total addressable market, as it currently holds only 12% compared to Nvidia's 88%.
- This strategic pivot is part of AMD's broader efforts to enhance shareholder value and strengthen its competitive position in the industry.
Advanced Micro Devices, Inc. (AMD) is undergoing a strategic shift in its approach to the gaming GPU market, aiming to increase its market share significantly. The company is focusing on mainstream and mid-range GPUs rather than directly competing with Nvidia's high-end offerings. AMD's Senior Vice President, Jack Huynh, stated that the goal is to capture 40%-50% of the total addressable market, as Nvidia currently dominates with an 88% share, leaving AMD with only 12%. This shift is crucial for AMD to build scale and enhance its competitive position. In addition to its focus on gaming GPUs, AMD is actively pursuing initiatives to boost shareholder value. The company has recently hired Nvidia's Keith Strier, who played a key role in Nvidia's commercial engagements with foreign governments. This move indicates AMD's intent to strengthen its market presence and explore new opportunities in the AI sector. Furthermore, AMD is planning to acquire AI server company ZT Systems for $4.9 billion, a decision made in light of the underperformance of its Ryzen 9000 series. This acquisition is expected to bolster AMD's capabilities in the AI market, which is increasingly becoming a focal point for technology companies. Despite a 28% increase in AMD's stock over the past year, both AMD and Nvidia have faced a selloff in semiconductor and AI-linked stocks, with significant declines in related ETFs. As of the latest check, AMD's stock was up 1.37% at $136.20, while Nvidia's stock rose by 1.22% to $104.05.