AMD stock spikes after company launches AI chip to rival Nvidia
AMD shares rose 9.9% Thursday to close at $128.37, marking the stock’s best day since May and the highest close since June. The surge comes a day after it launched new artificial intelligence chips that will compete against Nvidia $NVIDIA(NVDA.US$ to power AI applications.
Nvidia has dominated the AI chip market for the past year, but cloud providers and technology companies have been searching for an alternative to save costs and provide flexibility.
Thursday’s rise in AMD shares suggests investors believe the chipmaker can take a chunk of the AI chip market from Nvidia, although the company projects only $2 billion in AI GPU sales in 2024 — lower than market expectations for Nvidia AI revenue. Wall Street expects Nvidia to post more than $16 billion in data center sales in the current quarter alone, although that metric includes other chips besides AI GPUs.
“We believe that today’s event highlighted how AMD remains extremely well positioned to take advantage of the rapidly expanding AI TAM, as they continue to stack up customer partnerships and roll out products with impressive (and extremely competitive) performance metrics,” Deutsche Bank analyst Ross Seymore wrote in a note Thursday.
Citi analysts estimated in a note Thursday that AMD could end up with about 10% of the total AI chip market.
“I think it’s clear to say that Nvidia has to be the vast majority of that right now,” Su told reporters Wednesday, referring to the AI chip market. “We believe it could be $400 billion-plus in 2027. And we could get a nice piece of that.“ $NVIDIA(NVDA.US$ $Advanced Micro Devices(AMD.US$
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Steady Rise : Wallstreetbets on $Advanced Micro Devices (AMD.US)$