AMD’s stock had a 9.9% increase on Thursday, closing at $128.37, its biggest close since June and its best day since May. The spike occurs one day after it unveiled new AI processors that aim to take on Nvidia in the AI application market.
The CEO of AMD, Lisa Su, spoke on Wednesday about the previously revealed Instinct MI300X, a sizable graphics processor intended for AI-focused servers, and she stated that Microsoft and Meta have committed to using the chip.
Although Nvidia has been the market leader in AI chips for the past year, cloud service providers and IT firms have been looking for alternatives that offer flexibility and cost savings.
Although the firm expects only $2 billion in AI GPU sales in 2024 — lower than market expectations for Nvidia AI revenue — the surge in AMD shares on Thursday implies investors believe the chipmaker may capture a piece of the AI chip market from Nvidia. Wall Street anticipates that Nvidia will sell more than $16 billion worth of chips to data centres in only the current quarter, however that figure does not only contain AI GPUs.
Next year, large-scale shipments of AMD’s new flagship processor will begin.
“We feel that the event today demonstrated how AMD is still incredibly well-positioned to benefit from the quickly growing AI TAM, as they continue to build up customer relationships and release products with remarkable (and fiercely competitive) performance metrics,” Deutsche Bank analyst Ross Seymore stated in a note on Thursday.
AMD may wind up with roughly 10% of the market for AI chips, according to estimates made by Citi analysts in a note on Thursday.
Source (CNBC)
