On January 4, 2023, Lisa Su is scheduled to deliver a presentation at CES-2023 in Las Vegas, Nevada, showcasing an AMD Instinct MI300 device.
The stock of AMD experienced a notable surge on Thursday, climbing by 9.9% to reach a closing price of $128.37. This upturn marked the stock’s most significant growth since May and its highest closing value since June. The surge followed the recent launch of new artificial intelligence chips by AMD, positioning them in direct competition with Nvidia in the realm of AI application processing.
During discussions on Wednesday, AMD CEO Lisa Su elaborated on the Instinct MI300X, a robust graphics processor tailored for AI-centric server applications. Su also disclosed commitments from tech giants Microsoft and Meta to integrate this chip into their platforms.
While Nvidia has dominated the AI chip market over the past year, there is a growing demand from cloud service providers and tech companies for alternative solutions that offer cost efficiency and flexibility.
Despite AMD’s projection to sell 2 billion AI GPUs in 2024, a figure below market expectations for Nvidia, the surge in AMD’s stock value on Thursday indicates investor confidence in the company’s potential to capture a portion of the AI chip market from its competitor. Analysts on Wall Street anticipate Nvidia to generate over $16 billion in data center revenue in the upcoming quarter, a figure inclusive of various chip segments beyond AI GPUs.
The forthcoming shipment of substantial quantities of AMD’s new high-end chip signifies a pivotal moment for the company.
Deutsche Bank analyst Ross Seymore emphasized in a Thursday note, “We believe that today’s event showcased AMD’s strong positioning to capitalize on the expanding AI Total Addressable Market (TAM), evident through their growing customer partnerships and the introduction of products with impressive performance metrics that are highly competitive.”
Citi analysts, in a statement released on Thursday, forecasted that AMD could secure approximately 10% of the overall market share for AI chips in the future.
During the launch event on Wednesday, Su projected a global market value of $400 billion for AI chips over the next four years, doubling the initial estimates. Su expressed confidence to reporters that AMD’s substantial presence in the market would not necessitate surpassing Nvidia to achieve success in the AI chip sector.
Su articulated to reporters on Wednesday, regarding the AI device sector, “I think it’s obvious to state that Nvidia has to be the great majority of that proper now. In 2027, we think it might be $400 billion or more. And we might be able to obtain a good bit of that.”
