AMD Gains Graphics Card Market Share, but Is Still a Distant Second to NVIDIA

Advanced Micro Devices (NASDAQ: AMD) gained ground against rival NVIDIA (NASDAQ: NVDA) in the graphics card market during the second quarter, even before the launch of its newest products.

Jon Peddie Research reported Thursday that AMD scored a 32.1% unit share of the discrete desktop graphics card market in the second quarter, up nearly 10 percentage points from the first quarter. NVIDIA remained the overwhelming market leader with a 67.9% unit share.

If integrated graphics processors and laptop graphics chips are included, AMD edged out NVIDIA in terms of unit market share in the second quarter. NVIDIA doesn't sell CPUs, so this comparison isn't apples-to-apples.

An AMD graphics chip.

Image source: AMD.

The overall market for desktop graphics cards contracted in the second quarter, with unit shipments down 16.6% from the first quarter and down 39.7% year over year. The industry continued to deal with the supply glut created by the collapse of the cryptocurrency bubble, which has reduced sales for both AMD and NVIDIA this year.

AMD launched the first two graphics cards based on its latest architecture in early July, after the end of the second quarter, and reviews were generally positive. The RX 5700 and RX 5700 XT beat comparably priced graphics cards from NVIDIA on performance, marking the first time in many years AMD has been genuinely competitive outside the lower end of the market.

With AMD able to compete with NVIDIA on performance and price, the company could see more market share gains over the next few quarters, especially if it rolls out additional products to compete at other price points.

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Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool has a disclosure policy.

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