Zhitong Finance and Economics noted that Nvidia (NVDAUS) investors repriced its rivals in the chip industry after last night it reported a blowout fourth-quarter earnings report, with AMD (AMD.).US) shares traded higher on Thursday, extending an impressive year-to-date gain.
Under CEO Lisa Su's leadership, AMD is the only true competitor to Nvidia's global market dominance in the field of AI chips with its new Mi300X chip.
Late last year, the group launched the MI300 series, designed to support generative AI technology, and launched the Instinct M1300A, a next-generation semiconductor focused on supercomputing.
Analysts say the Mi300X could challenge Nvidia's H100 graphics processing unit chip, which dominates the large language model AI market.
Purdy Ho, an analyst at Huatai Research, said: "We believe AMD's MI300 is one of the most capable products to challenge NVIDIA. "Notably, Lamini AI has already announced the use of the MI300 and plans to use it for training large models. ”
He added: "Tech giants such as Microsoft, Meta, Oracle and others have also committed to the MI300 series. ”
Last month, AMD said the new chips could generate about $3.5 billion in sales in the coming year as the group uses its new products to counter Nvidia and meet surging global demand.
AMD: The AI market could reach $400 billion.
AMD CEO said that the AI chip market could reach $400 billion in the next four years, double what Lisa Su expected in August last year, which is a bigger upgrade from the previous **.
AMD CTO Mark **Master said at an event earlier this week"When we think of $400 billion, it's an accelerator (addressable market). ""You can think of it as an expansion when the Internet first came out, and you need to do the whole expansion, not just computing, but also the network, infrastructure, etc. It's a new platform. ”
However, AMD's production capacity has been strained to meet surging demand, even though Ms. Su told investors last month that AMD has"Significant progress has been made with **Chain partners and additional capacity has been secured to support upside demand. "
While the statement doesn't directly mention its larger rivals, it does highlight one of the major headwinds Nvidia has faced in the near term.
Chip-on-wafer-on-substrate (CoOS), a key component of AI chip manufacturing, has been dragging down Nvidia's deliveries for much of the past year.
TSMC (TSM., the world's largest chip contractorUS) has struggled to meet the surge in demand for its high-end stacking and packaging technology, warning investors that "this could continue into next year".
* Chain issues cast a shadow over Nvidia.
Nvidia said it expects its next-generation chips, including the taller B100 Blackwell, to be "in short supply" in the short term.
Nvidia CEO Jensen Huang told investors at a ** conference later Wednesday: "We expect demand to continue to be stronger than ours this year, and we will do our best." "The cycle is improving, and we will continue to do our best. ”
Nvidia said it will launch H20 chips that meet the new export rules later this year.
Nvidia's monopoly in the broader AI chip market is unlikely to be challenged by AMD in the coming year or beyond. But as companies (and increasingly**) look to harness the potential of AI technology, they'll be looking for new GPUs** so as not to lag behind other high-paying customers.
This could significantly accelerate AMD's near-term growth rate.
FOMO could boost AMD's sales.
"We are encouraged by the outlook for data centers (graphics processing units) as AMD rolls its MI300X to cloud providers," CFRA analyst Angelo Zino said in a recent customer note. "We think our expectations for GPUs are conservative, with upside for both 2024 and 2025. ”
Zino added that AMD will soon launch a new ZEN 5 chip for the PC market, enabling them to manage AI tasks directly on their laptops.
AMD shares are also cheaper than Nvidia, with an expected P/E ratio of 44x (Nvidia's forward P/E ratio of 57x), although this also reflects Nvidia's sales growth at a much faster rate and higher overall profit margins.
Despite this, AMD's share price is 65% higher, while Nvidia's stock price is 152% higher. In May last year, Nvidia released a shocking first-quarter earnings report, which effectively kicked off the global AI investment race.
John Vinh, an analyst at Keybanc Capital Markets, said"We strongly believe in AMD's strategy to revitalize its product roadmap and make its products compelling." "He has an Overweight rating on AMD** and a price target of $270.
However, market expectations for share prices** and growth are high. We are concerned that any expected modest decline could pose significant risk to the stock based on valuations that are well above peers. ”