Citigroup analyst convinced Intel Kaby Lake will trump AMD Zen

Earlier this month, AMD's stock price hit a multi-year high of $8.0 but the last couple of days selling pressure pushed the stock back to the $6 mark. First there was the new agreement with GlobalFoundries and about a week later AMD announced a deal that would lower its debt burden at the expense of further shareholder dilution.

AMD's share price is still up more than triple versus this year's low but the gains are primarily driven by speculation that things are finally turning around. Investors have high hopes that Zen will enable AMD to reclaim marketshare in the processor market, but it appears not everyone is convinced about AMD's future plans.

Christopher Danely with Citigroup recently issued a Sell rating on AMD shares, arguing that Intel's Kaby Lake is poised to remain a step ahead of AMD's Zen architecture. Furthermore, Danely predicts the technology gap between AMD and Intel will widen again once Intel migrates to 10nm next year as he has little confidence in GlobalFoundries due to the foundry's "spotty track record":

Intel released its new Kaby Lake chips on an improved 14+nm process this month, featuring a 15% performance improvement over its Skylake chips. We expect independent benchmarks to show Intel’ performance is a step function ahead of AMD Zen when Zen chips are released in 4Q16. During IDF 2016 in August, Mike Bohr, Intel Technology and Manufacturing Group Director, introduced a new 14+ process, which is an optimized version of Intel’s standard 14nm process used in both Broadwell and Skylake platforms. The 14+ process provides a 12% performance improvement over the standard 14nm process. The resulting Kaby Lake chips deliver up to 12% faster productivity performance and 19% faster web performance over comparable Skylake chips [...]

After several of delays and eventually failing to develop 20nm and 14nm on its own, GlobalFoundries entered into a partnership agreement with Samsung in April 2014 to adopt Samsung’s 14nm FinFET process. Despite using the same tools, recipes, and materials as Samsung’s 14nm process, products built on GlobalFoundries’ 14nm did not appear until earlier this year, roughly one year after Samsung released its Exynos 7420 SoC built on its 14nm process. Additionally, since the partnership agreement with Samsung does not include 10nm or lower nodes, we think the technology gap between AMD and Intel will widen again once Intel migrates to 10nm next year.

Danely also questions the vality of the Blender benchmark results from AMD, pointing out it's just one custom workload performed under controlled conditions:

The AMD controlled benchmark compared an engineering sample of a Zen processor that has not been released yet against a three-month old Intel processor, with both chips clocked at 3.0 Ghz. We would note the maximum speed for the Intel chip is 3.2 GHz. The result showed AMD completing the benchmark 2% faster than Intel, implying higher CPU efficiency on a “clock for clock” basis. AMD kept both 8 core chips at the same clock speed of 3.0 Ghz, below the native clock speed of the Intel chip. The benchmark result showed the Zen Summit Ridge processor completing the Blender rendering benchmark in 48.07 seconds, 2% ahead of Intel Broadwell-E chip’s time of 49.06 seconds. We note this is only one benchmark using a custom workload performed at an AMD event under controlled conditions, and therefore cannot be verified by third parties and does not represent expected results under all workloads.