Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Microservers and Advanced Micro Devices, Inc. (AMD)’s Future

Advanced Micro Devices, Inc. (NYSE:AMD) is seeking to diversify its product portfolio, especially due to the fact that worldwide shipments of PCs are expected to fall about 9.7% this year (IDC). On Monday, the management presented chips designed to run slot machines, factory robots, airport signs, medical equipment and other devices. These new products will be available as of next year and should help the firm reach a wider public and new markets.

The announcement seems to have inspired confidence amongst investors, as Advanced Micro Devices, Inc. (NYSE:AMD)´s stock rose by more than 3% on Monday, and 4% on Tuesday, standing amongst the most active New York Stock Exchange-traded stocks of the day. However, the impact of the company’s design wins in all three of the major game controllers cannot be disregarded. Advanced Micro Devices, Inc. (NYSE:AMD)´s chips will be present in Microsoft Corporation (NASDAQ:MSFT)’s, Sony Corporation (ADR) (NYSE:SNE)’s and Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY)’s new game consoles.

Advanced Micro Devices, Inc. (NYSE:AMD)Back to Monday´s disclosure, a fact to highlight: Advanced Micro Devices, Inc. (NYSE:AMD) will become the first company to offer both ARM and x86 chips for low-power and high-performance embedded designs (microservers, mainly). “The new lineup includes two best-in-class x86 accelerated processing units (APUs) and central processing units (CPUs), a first look at a high-performance ARM system-on-chip (SoC) and a new family of discrete AMD Embedded Radeon™ graphics processing units (GPUs) expected to launch in 2014” (AMD Press Release).

The announcement can be understood as a part of Advanced Micro Devices, Inc. (NYSE:AMD)´s new business strategy, which aims to shift its focus towards the high-growth embedded market. The new processor solutions will further help the company penetrate this segment, in which it had already made a very successful foray with its award-winning Embedded G-Series SoC family.

The decision to change its focus looks like a smart one, since Advanced Micro Devices, Inc. (NYSE:AMD) has been Intel Corporation (NASDAQ:INTC)´s underdog for too long. As the industry leader, Intel Corporation (NASDAQ:INTC)´s enjoys of all kinds of scale and long-term advantages. Having reckoned this, AMD has been dedicating solely to design while outsourcing manufacturing since 2009. This has allowed the company to create technologically differentiated products that set it apart from Intel Corporation (NASDAQ:INTC). The last (cutting-edge) products launched by Advanced Micro Devices, Inc. (NYSE:AMD) are a clear example of this.

Meanwhile, non-PC markets continue to grow and Advanced Micro Devices now seems better positioned to profit from them. And, although many would expect the mobile segment to drive growth, the microserver industry looks like the one that will make a difference for AMD going forward.

Disclosure: Javier Hasse holds no position in any stocks mentioned

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.