Main topic: Performing AI tasks on affordable AMD APUs
Key points:
1. The AI boom has created a high demand for Nvidia's expensive GPUs.
2. A modder discovered a method to use AMD APUs costing around $100 for AI tasks.
3. The APUs offer a cost-effective solution and can perform well compared to higher-end cards.
### Summary
Competitor Advanced Micro Devices (AMD) is preparing to release its most-advanced AI GPU, the MI300X, which could challenge Nvidia's dominance in the AI chip market.
### Facts
- AMD's MI300X, priced at about $5,800, is approximately 75% more expensive to make than Nvidia's H100 AI processor, which costs around $3,300.
- Despite the higher cost, AMD could still generate over 60% gross margins by pricing the MI300X at a significant discount to the H100.
- Analyst Srini Pajjuri believes both AMD and Nvidia have opportunities to succeed in the $100B+ Gen AI silicon market.
- Pajjuri's price targets for Nvidia and AMD suggest potential returns of 15% and 35% respectively over the next year.
- Both Nvidia and AMD have received Strong Buy ratings from analysts, according to TipRanks.
Wall Street analysts are optimistic about chipmaker Advanced Micro Devices (AMD) and its potential in the AI market, despite the current focus on Nvidia, with several analysts giving a Buy rating on AMD's stock and expecting solid upside potential.
Nvidia has reported explosive sales growth for AI GPU chips, which has significant implications for Advanced Micro Devices as they prepare to release a competing chip in Q4. Analysts believe that AMD's growth targets for AI GPU chips are too low and that they have the potential to capture a meaningful market share from Nvidia.
Chip stocks, including Nvidia, experienced a selloff in the technology sector despite Nvidia's strong performance, leading to concerns that spending on AI hardware may be affecting traditional chip companies like Intel.
Advanced Micro Devices (AMD) is well-positioned to thrive in the artificial intelligence accelerator chip market and benefit from favorable trends in the data center, AI, and gaming, making its shares undervalued, according to Morningstar.
AMD investors may be feeling left out as the company struggles to match the financial growth and stockholder returns of its competitor, Nvidia, but there is still potential for AMD to narrow the gap in the generative AI market and offer solid returns in the long term.
Advanced Micro Devices Inc. (AMD) has acquired Mipsology, an AI software company focused on computer interpretations and responses to photos and videos, in an effort to accelerate its solutions for AI workloads.
Nvidia's stock slips after reaching a record high, but analysts suggest that the chip maker may still be a bargain.
Insiders at Advanced Micro Devices (NASDAQ:AMD) have been selling a significant stake in the company, raising concerns among investors.
Tech companies, such as Microsoft, Amazon, and Advanced Micro Devices (AMD), are attractive investment choices due to their long-term potential in AI, e-commerce, and chip development, respectively. These companies have a history of offering reliable gains and are well-positioned to benefit from the growth and demand in the tech industry.
Advanced Micro Devices (AMD) stock is rising as investors recognize its potential in the artificial intelligence (AI) hardware market, making it a strong competitor to Nvidia, especially with the launch of its M1300X AI chip in the third quarter of 2023.
TSMC has warned that sourcing high-end GPUs from Nvidia will remain difficult until at least the end of 2024 due to a lack of advanced packaging capacity, affecting not only Nvidia but also AMD's upcoming Instinct MI300-series accelerators that rely on the same packaging technology.
Despite a significant decline in PC graphics card shipments due to the pandemic, Advanced Micro Devices (AMD) sees a glimmer of hope as shipments increase by 3% from the previous quarter, indicating a potential bottoming out of demand, while its data center GPU business is expected to thrive in the second half of the year due to increased interest and sales in AI workloads.
Nvidia's data center graphics cards continue to experience high demand, leading to record-high shares; however, investors should be aware of the risk of AI chip supply shortages. Microsoft and Amazon are alternative options for investors due to their growth potential in AI and other sectors.
Nvidia's record sales in AI chips have deterred investors from funding semiconductor start-ups, leading to an 80% decrease in US deals, as the cost of competing chips and the difficulty of breaking into the market have made them riskier investments.
AMD's director for the commercial client business, Justin Galton, believes that AI adoption on desktops is not yet widespread and may take some time to become apparent, with AMD's dedicated AI accelerator currently only available in one CPU model and more AI-equipped processors set to be released in 2024. Galton also mentioned that small to medium businesses may not be enthusiastic about AI, and that Intel may have more AI-ready desktop processors than AMD. Additionally, a gaming market report predicts a drop in demand for gaming PCs in 2023, while gaming monitor shipments are expected to increase. With regards to AMD's products, Galton said that buyers are currently opting for modestly priced PCs with Ryzen 5000 and 6000 models due to Intel's excess inventory. Additionally, AMD aims to expand its market share in commercial PCs to 20% in 2024.
The server market is experiencing a shift towards GPUs, particularly for AI processing work, leading to a decline in server shipments but an increase in average prices; however, this investment in GPU systems has raised concerns about sustainability and carbon emissions.
UBS analysts have observed a rise in average prices for graphics processing units (GPUs) despite a decline in sales volumes, with AMD's products increasing by 1% and Nvidia's GPUs rising by 3%; the decrease in transaction volumes may be attributed to a lack of available GPUs, potentially signaling a slowdown in the GPU upgrade cycle.
Despite being in a downturn, both Micron and Intel have the potential for a strong turnaround, with Micron currently demonstrating technology leadership and increasing momentum, making it a potential better buy than Intel.
The semiconductor industry, particularly in the AI and Web 3.0 era, offers growth and security opportunities for top-performing companies, with Nvidia, Advanced Micro Devices (AMD), and Intel Corp (INTC) being three chip stocks to buy now that are outperforming the market and have room for further growth.
AMD has the edge over Intel in terms of PC gaming performance, particularly with their high-end processors featuring 3D V-Cache, while Intel performs better in content creation and productivity tasks, and the two are generally on par for laptop gaming performance.
The current market is divided between believers and skeptics of artificial intelligence, with the former viewing the recent surge in AI stocks as a long-term opportunity, while the skeptics see it as a short-term bubble; two top performers in the AI sector this year are Nvidia and Super Micro Computer, both of which have built business models optimized for AI computing over the past couple of decades, giving them a competitive edge; however, while Nvidia has a strong head start, competitors such as AMD and Intel are also aggressively pursuing the AI market; when it comes to valuation, both Nvidia and Super Micro appear cheaper when considering their potential growth in the AI industry; in terms of market share, Nvidia currently dominates the general-purpose AI GPU market, while Super Micro has made significant strides in expanding its market share in the AI server market; ultimately, choosing between the two stocks is a difficult decision, with Super Micro potentially offering better prospects for improvement and a lower valuation.
AMD's stock price has fallen in recent years despite its involvement in the AI market, but with comparable AI solutions to Nvidia and more affordable valuation metrics, it could be a strong long-term investment opportunity.
