Advanced Micro Devices 1% Weaker, Bernstein Wary of GPU Prices

Advanced Micro Devices (AMD) shares were more than 1% lower in late trade on Wednesday as Bernstein grew wary of the average selling selling prices of its graphic processing units.

“Analysis of available data suggests CPUs have likely been relatively flattish, with strong Ryzen offset by legacy declines,” Bernstein said in a note. “In fact, we believe GPUs have been by far the primary growth driver, likely up 80%+ YoY in 2017, & approaching ~$700M in Q118, up >200% YoY.”

The analyst said AMD is likely benefiting from increased average selling prices for its GPUs, adding that demand for AMD’s Vega line is coming more from cryptocurrency miners than from gamers.

“Therefore this strong mix-driven growth presents a bit of a conundrum,” Rasgon said. “If it turns out that gamers do not step up to Vega as mining tails off and constraints ease vs. Nvidia (NVDA), +0.98% alternatives (a plausible scenario given relative performance, power usage, & pricing), AMD could suffer not only unit shortfalls in a crypto decline but also ASP pressures if mix trends down, potentially exacerbating any effects.”