In early Thursday trade, AMD experienced an uptick in buying activity following the announcement of new accelerator chips aimed at entering the competitive artificial intelligence (AI) market, currently dominated by Nvidia. AMD emphasised its ability to execute AI software more efficiently than comparable products from its rival.
The MI300X accelerator took center stage during the event and was deemed by analysts at Deutsche Bank to be well-positioned to address the AI market. The analysts expressed confidence in AMD’s competitive performance metrics and customer partnerships, believing the company is well-poised to capitalise on the expanding AI Total Addressable Market (TAM). They anticipate MI300 sales exceeding $2 billion in CY24, with the MI300X expected to attract the majority of sales. AMD showcased metrics indicating the MI300 chip outperformed Nvidia’s H100, although Nvidia plans to release the H200 in the near future.
Furthermore, AMD raised its projected 2027 Data Center Accelerator TAM from the initially stated $150 billion to an ambitious $400 billion. While some analysts, such as those at Citi, expressed skepticism about this forecast, citing a more conservative estimate of around $75 billion for the next year, they acknowledged AMD’s potential to capture approximately 10% of the market, particularly in the inference market.
Ahead of the market opening, AMD shares showed a 2.9% increase, rebounding from a 1.3% decline in the previous trading session. The developments underscored the company’s strategic moves to carve a significant space in the competitive AI sector, challenging the dominance of Nvidia.
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