Advanced Micro Devices Inc (NASDAQ:AMD) just unveiled its next wave of AI weaponry, and it’s taking aim at none other than Nvidia Corp (NASDAQ:NVDA).
AMD is gearing up to claim a bigger slice of the AI pie in an AI event packed with hardware reveals, partnerships, and tantalizing hints of future dominance. But can the underdog challenge the reigning champ in AI accelerators?
JPMorgan’s Harlan Sur remains cautious, sticking with a Neutral rating while highlighting the hefty potential in AMD’s AI-focused arsenal.
AI Market Outlook: Bigger, Better, Faster
AMD’s AI event wasn’t just a product showcase; it was a declaration of intent. The company bumped up its AI accelerator total addressable market (TAM) outlook from $400 billion in 2027 to a massive $500 billion by 2028, thanks to a continued surge in AI model deployments and use cases, Sur noted.
The TAM growth may decelerate as we inch toward 2028, but AMD’s strong foothold with its CPUs, GPUs, and DPUs puts it in a prime position to capture more of the AI wave.
The recent ZT Systems acquisition will also help AMD iron out any kinks in production and speed up customer ramp-ups—a clear sign the company is focused on scaling fast, the analyst said.
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MI325X GPU: AMD’s AI Champion Steps Into The Ring
The event’s highlight? AMD’s MI325X, a GPU designed to go head-to-head with Nvidia’s H200 HGX in AI training. While the MI325X holds its own in training, it takes the crown in AI inferencing, outpacing Nvidia’s H200 by 1.4x. Production shipments start soon, and with the MI350 set for 2025—boasting a 1.8x boost in AI compute performance—AMD is clearly not backing down in its GPU battle with Nvidia.
But, as Sur points out, this race is a marathon, not a sprint. AMD is ramping up, but Nvidia’s lead still looms large, and capturing market share will take time.
Server CPUs: AMD’s Zen-Fueled Takeover
AMD isn’t leaving its core CPU game behind, either. The company launched its next-gen EPYC processor, codenamed “Turin,” built on its Zen 5 architecture.
With a 40% performance edge over Intel’s Granite Rapids, AMD continues to eat up server CPU market share.
Sur noted that AMD’s server CPU share jumped from 31% to 34% in the first half of 2024, and Turin could drive further gains in the coming quarters.
Software, Strategic Partnerships: The Secret Sauce
Beyond hardware, AMD’s progress on the software front is crucial. The ROCm 6.2 software stack has shown a 2.4x improvement in AI inference performance—critical for staying competitive in a market where software optimization can be a game-changer.
Add in deep partnerships with cloud giants like Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), and Oracle Corp (NYSE:ORCL), and AMD has the strategic backing to take on the big leagues.
The Bottom Line?
AMD’s AI event showcased a tech company ready for battle, but dethroning Nvidia will not be easy.
Sur’s price target of $180 by the end of 2025 reflects optimism but caution as AMD’s ramp-up in AI accelerators and servers plays out over the next few years.
Keep an eye on AMD stock as it gears up for its biggest AI push yet—this might be a battle worth watching.
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