This Could Be a Gross Margin Killer for AMD
Advanced Micro Devices (NASDAQ: AMD) has successfully transformed itself over the past five years into a formidable player in the CPU market. The company still trails Intel in terms of market share, but the days of AMD being run over by its larger rival appear to be over.
With that success has come greatly improved profitability. Before 2017 and the first iteration of its Ryzen PC CPUs, AMD was largely relegated to the budget segment of the market. The company now competes across all price points, trading blows with Intel as it goes after gamers, professionals, prosumers, and creatives willing drop many hundreds of dollars on blazing-fast CPUs.
You only have to look at AMD's gross margin to see how far the company has come. In the third quarter of 2017, AMD managed an adjusted gross margin of just 35%. By the third quarter of this year, adjusted gross margin had risen to 50%. That's quite a turnaround.
Source Fool.com
