Shares of Advanced Micro Devices Inc. (NASDAQ: AMD) have gained momentum as fellow graphics processor maker Nvidia has rallied. The common thread is interest in the prospects of artificial intelligence (AI), a market that is expected to grow sharply and could reach $400 billion in the next four years, according to AMD’s own estimates.
AMD shares were given a boost today by a report from Barron’s, which noted that the company is the only one that can offer a clear alternative to Nvidia’s graphics processors.
Analysts at Japanese research firm Huatai Research share a similar opinion. They noted that the AMD MI300 processor is the strongest competitor for Nvidia chips used in working with large machine learning models.
As noted earlier, AMD almost certainly won’t be able to take a larger market share than Nvidia. However, even a small share of the $400 billion market could provide AMD with a big boost in revenue. In addition, Nvidia, with its cutting-edge developments and large cash flow, is driving the AI industry forward. This creates areas for development, including for AMD.
Some investors and Wall Street analysts fear an AI bubble. However, tax authorities are interested in AI-powered automation technologies, hoping to extract huge “shadow profits” from their residents. Most likely, this idea will find enthusiastic support from politicians, and demand for AI chips will receive a boost in this segment at least.
Generative AI and high-performance computing have reached a tipping point, with demand growing rapidly across countries, Nvidia CEO Jensen Huang said.
At the close of trading on March 4, AMD shares were worth $205.89.
