In a potential game-changing move, Advanced Micro Devices (AMD) saw a notable rise in share prices, signifying a positive outlook for investors. During premarket trading on Wednesday, AMD stock saw an impressive 2% gain, taking the top spot as Yahoo Finance’s top trending symbol. This increase was sparked by an exclusive report from Reuters, which indicates that Amazon’s cloud arm is actively exploring the possibility of using AMD’s cutting-edge artificial intelligence chips.
Despite Yahoo Finance’s attempts to request a comment, Amazon remained mum on its stance on the matter. This report follows AMD’s recent announcement of its highly anticipated AI chips, the MI300, which directly rivals Nvidia’s formidable superchips.
Distinguishing themselves with a substantial advantage in memory capacities, MI300 chips offer an astonishing capacity of up to 192 GB. This significant advance positions AMD’s new chip as a prime candidate for integration into large language models (LLMs) commonly used in various AI applications.
Landing a contract with Amazon Web Services would certainly be a monumental achievement for AMD, bolstering confidence in their innovative offerings and potentially allowing them to make significant inroads into Nvidia’s market share.
During an exclusive interview with Yahoo Finance Live, AMD President and CEO Dr. Lisa Su expressed unwavering optimism about demand for its AI chips once they hit the market later this year. Dr. Su emphasized the extraordinary potential of the data center market, particularly in the realm of AI chips, projecting a staggering value of approximately $30 billion for this year alone. Additionally, it forecasts sustained annual growth rates of more than 50% over the next three to four years, ultimately culminating in a market worth approximately $150 billion.
While Dr. Su refrained from revealing specific pricing details for the M1300 chip, she assured stakeholders that AMD has the capacity to meet formidable chip demand in 2024. Despite a 3.6% drop in AMD shares on Tuesday, attributed to investor disappointment over a lack of information on pricing and launch customers, industry analysts continue to maintain a positive view. Notably, Salesforce CEO Marc Benioff, along with Baird analyst Tristan Gerra, predict that AMD is strategically positioned to capitalize on the impending wave of AI technology.
Gerra, in a comprehensive research note, raised his 2024 earnings per share (EPS) estimate for AMD from $4.09 to an impressive $5.50. Consensus estimates on Yahoo Finance suggest a figure of around $4.13 per share by 2024. Gerra’s estimate revision reflects growing sentiment that AMD, while still lagging behind Nvidia in terms of ecosystem maturity, is poised to become a major beneficiary of the AI ​​growth trend in the medium term.
As the story unfolds, the market is eagerly awaiting new developments on the potential collaboration between AMD and Amazon, recognizing the transformative impact such a partnership could have on the future of AI chip technology.
Also read: Tech Stocks Rise, Dow Jones Futures Fall After Debt Ceiling Agreement; Nvidia and Tesla soar