In today's technologically disruptive era, as artificial intelligence (AI) continues to see skyrocketing demand, Advanced Micro Devices (NASDAQ: AMD) is emerging as an exciting player to rival NVIDIA in semiconductor and AI chip development. According to the latest reports from Reuters, AMD has outlined an ambitious year-end roadmap, driven by the expected launch of its MI300 series of AI chips, which could compete with NVIDIA's offerings.
One key factor that endeared AMD to investors is its ability to meet customer needs even in areas where competitors are struggling with supply constraints. Demand for NVIDIA chips far outstrips supply, creating an ideal opportunity for AMD to fill this gap in the market and gain new customers for its MI300 chips.
From a technical perspective, AMD is also a very attractive investment choice. Since the beginning of 2023, the stock has risen nearly 100%, and a correction can currently be seen in this market, presenting an opportunity for investors to buy this stock at a discounted price. The stock saw its absolute peak in November 2021 at a price of $164. A rise to that level would represent an appreciation of another 40%. *
Despite current export restrictions that limit sales of MI300 chips to China, AMD is exploring the possibility of modifying its chips to comply with U.S. Department of Commerce regulations on sales of AI semiconductors to the Chinese market. The company remains committed to full compliance with these controls but also recognizes the opportunity to develop products for China, where there is significant demand for artificial intelligence solutions.
AMD CEO Lisa Su pointed out that there is still a lot of interest in the older MI250 line of chips, which remains an attractive option for less complex AI tasks.
Despite previous revenue constraints in the data centre and client business in the second quarter, double-digit revenue growth in both segments is expected in the coming quarter, thanks to rising demand for EPYC and Ryzen processors.
Investors, therefore, believe AMD has the potential to finish the year strong and compete effectively with NVIDIA in the growing AI chip market. They believe the company will be able to ramp production of its MI300 chips in the fourth quarter and meet demand that NVIDIA is struggling to meet.[1]
* Past performance is no guarantee of future results.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.
