Lisa Su shows an AMD Intuition MI300 chip as she delivers a keynote handle at CES 2023 in Las Vegas, Nevada, on Jan. 4, 2023.
David Becker | Getty Photos
AMD shares rose 9.9% Thursday to shut at $128.37, marking the inventory’s finest day since Could and the very best shut since June. The surge comes a day after it launched new synthetic intelligence chips that can compete towards Nvidia to energy AI purposes.
On Wednesday, AMD CEO Lisa Su mentioned the beforehand introduced Intuition MI300X, a big graphics processor designed for AI-oriented servers, and mentioned Microsoft and Meta had dedicated to utilizing the chip.
Nvidia has dominated the AI chip marketplace for the previous yr, however cloud suppliers and expertise firms have been looking for a substitute for save prices and supply flexibility.
Thursday’s rise in AMD shares suggests traders consider the chipmaker can take a piece of the AI chip market from Nvidia, though the corporate tasks solely $2 billion in AI GPU gross sales in 2024 — decrease than market expectations for Nvidia AI income. Wall Road expects Nvidia to put up greater than $16 billion in information middle gross sales within the present quarter alone, though that metric contains different chips apart from AI GPUs.
AMD’s new high-end chip begins transport in vital portions subsequent yr.
“We consider that right now’s occasion highlighted how AMD stays extraordinarily effectively positioned to reap the benefits of the quickly increasing AI TAM, as they proceed to stack up buyer partnerships and roll out merchandise with spectacular (and intensely aggressive) efficiency metrics,” Deutsche Financial institution analyst Ross Seymore wrote in a observe Thursday.
Citi analysts estimated in a observe Thursday that AMD might find yourself with about 10% of the entire AI chip market.
Su mentioned on the launch occasion Wednesday that the corporate believes the entire marketplace for AI chips might climb to $400 billion over the subsequent 4 years, twice as excessive as the corporate beforehand believed. Su advised to reporters that AMD does not must beat Nvidia to do effectively out there for AI chips as a result of it will likely be so massive.
“I believe it is clear to say that Nvidia needs to be the overwhelming majority of that proper now,” Su informed reporters Wednesday, referring to the AI chip market. “We consider it may very well be $400 billion-plus in 2027. And we might get a pleasant piece of that.”
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