Quick question for you financial guru's.
If Amd is gaining so much market share why is Nvidia's stock 2x the value of AMD's?
Can you explain this in plain english for me? Does it have something to do with actual profits?
That's because NVDA has better prospects than AMD, at least for now.
AMD :
1. AMD x86 CPUs: weak. AMD is not doing that well in x86 CPU market where they have settled on the low-end, low-profit market. To be fair, INTC basically bribed people to shun AMD, and even though INTC had to pay $$$$ to settle the resulting lawsuit, the damage was done. And INTC could easily afford the $$$$ settlement and have plenty of $$$$ left over to keep pushing their R&D advantage on everyone else.
By the way, ARM and INTC are the two players in the server space now, especially with performance/watt being more and more important. AMD can't compete and has bled lots of market share since their heyday when they had ~30% share.
Lastly, even if AMD were to get more market share, the size of the x86 CPU market is stagnant/declining. The market momentum has shifted strongly towards ARM and phones/tablets. Both INTC and AMD (and even MSFT) are hurting from this strong trend toward smartphones/tablets, which is almost exclusively owned by ARM. MSFT recently acknowledged this and is making a version of Windows 8 that will run on ARM processors. Yes, you read that right.
2. ATI: doing okay, but.... ATI has done well to claw back consumer market share and profits from NVDA in the desktop discrete graphics space, but NVDA fixed its Fermi problems, so ATI's advantage has slipped there. ATI has the advantage of being able to integrate low-end graphics chips and making chipsets and such, so it's doing okay in IGPs and EPGs, especially in mobile. I say "okay" not not "well" because NVDA has some leverage with Optimus on the high end, and INTC is coming up quickly from the rear with decent IGPs/EPGs on their newer processor lines.
ATI does have a potentially great advantage in consoles, though. Their tech powers Nintendo Wii, XBOX, and the successor to the Wii. ATI may also get the contract for the successor to the XBOX 360; in fact I would bet that it's more likely than not. NVDA has the PS3, but it's not clear they will win the contract for the successor to the PS3. NVDA has a rep for being hard to work with, which doesn't help.
What ATI doesn't do so well on is non-consumer graphics, where the margins are much, much higher than consumer graphics. NVDA makes a killing on professional graphics and basically has a monopoly in that market (nearly 90% market share). NVDA is also the de facto leader in GPU supercomputing, though that's a nascent industry and hasn't yet contributed significantly to the bottom line. But it's poised for growth, whereas ATI can't really compete. There are a few things ATI chips can do better than NVDA chips, and yeah there was that supercomputer with lots of 4870x2s in it or whatever, but NVDA is the one piling on the software support and really pushing the GPU supercomputing market forward. ATI might have good hardware, but hardware without software is like a two-legged racehorse.
3. AMD/ATI debt: major. AMD is and was being bled dry in its attempt to keep pace with INTC. They finally gave up their fabs by forming GloFo, at least. Compare this to NVDA, which has much lower debt.
NVDA:
I already did my analysis of NVDA earlier in this thread. They have their own problems (stagnant PC market, slow ramp-up of the Tegra series, and losing their chipset business and their low-end discrete GPU business to EPGs/APUs), but at least they have some well-defended cash cows (pro graphics, and eventually GPU supercomputing, though it's a relatively small income stream right now), unlike AMD/ATI, which has no well-defended cash cows. In fact, I'd say that they don't really have any cash cows at all other than console graphics. I suppose you could argue that ATI has a cash cow in discrete PC graphics, but I don't think of it that way. I don't think ATI *OR* NVDA can heavily rely on making lots of money off that market segment every single quarter, due to the heavy competitive pressure there that drives down margins. Compare that to NVDA basically raking it in every quarter from pro graphics cards (Quadro).