AMD Might Spin Off Radeon GPU Business And I Like It

AMD Might Spin Off Radeon GPU Business And I Like It

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This article originally appeared on Seekingalpha.com, written by Alcaraz Research

Summary

  • CEO Dr. Lisa Su is allegedly planning to split AMD into two separate entities.
  • An independent Radeon GPU company could be more agile in regaining lost market share to Nvidia.
  • Apple drops Nvidia’s GPU for AMD’s Radeon M370X for the new MacBook Pro 2015.

Liana B. Baker of Reuters has a scoop alleging Dr. Lisa Su is asking consultants over the viability of splitting Advanced Micro Devices (NASDAQ:AMD) into two separate business entities, or spinning off a business division. Either way, I firmly believe that an entirely independent Radeon GPU outfit could be a long-term winner.

Radical tactics are sometimes needed during desperate times. AMD is in a quandary right now. Intel (NASDAQ:INTC) is lording it over on x86 desktop and server processors. Nvidia (NASDAQ:NVDA) has also grossly outperformed sales of Radeon GPU over the last two years.

A spin off of the Radeon GPU division could happen this year. Hewlett-Packard (NYSE:HPQ) is also splitting in to two entities to make it more agile. The same reasoning might also be true for AMD’s alleged intention to spin out its GPU division.

I Know First Research has Buy signals for AMD. The 90-day and 1-Year forecast scores of AMD are both positive, suggesting the stock has long-term upside potential.

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Four TipRanks analysts are also calling for a Buy on AMD. The average 12-month price target for AMD among TipRanks analysts is $2.93. This price target is feasible considering Apple now uses Radeon GPUs on its high-end iMacs, MacBook Pros, and Mac Pro desktop computers.

Furthermore, Samsung (OTC:SSNLF) has also opted to use AMD’s Embedded G-Series SoC to power its upcoming Windows thin-client computing monitors. This is another notable design win for AMD. IDC expects thin-client computers for the enterprise market to sell 7.2 million units by 2018.

Hewlett-Packard has also announced earlier this year that its G-Series SoC will get inside Hewlett-Packard’s thin-client computers. Hewlett-Packard is currently the leader in thin-client computer product sales.

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