On October 10, Advanced Micro Devices (NASDAQ: AMD) held its ‘Advancing AI’ event, announcing a wide range of new products. Despite this, the event, which historically caused AMD stock price to rise, was followed by a 3.19% decline.
At press time a1, AMD shares were trading for $164.24. Even with this recent dip, the stock is up 18.89% year-to-date (YTD) after a 9.94% rally over the course of the last 30 days.
AMD’s new line of products
Seeking to make further inroads in the booming AI sector, AMD showcased a wide range of products aimed at securing a larger market share.
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As it currently stands, Nvidia (NASDAQ: NVDA) holds a commanding lead, controlling about 80% to 85% of the market, with the rest shared between Broadcom (NASDAQ: AVGO) and Marvell Technology (NASDAQ: MRVL).
The products on display were certainly impressive — the MI325X GPU, set to launch in early 2025, boasts 1.8 times more memory than Nvidia’s H200.
The chipmaker hopes that it can serve as a close substitute for Nvidia’s new Blackwell line. If that comes to pass, not only will the business accrue new profits — but Nvidia will also experience pricing pressure. The slated release date for the MI325X is Q1 2025.
Nvidia isn’t the only target that AMD has set its sights on, however — per CEO Lisa Su, the company currently only has a 34% share of the data center CPU market. The release of the new EPYC 5th gen ‘Turin’ CPUs, which are tailored for cloud and AI workloads, is a bid at taking some of the revenue going to Intel (NASDAQ: INTC), which is currently struggling amidst restructuring.
AMD did not announce any new customers
One notable factor was missing, however — the event saw no announcements of new partnerships.
Such announcements are typically strong bullish signals — the September announcement that Oracle Cloud Infrastructure (NYSE: ORCL) would be deploying AMD GPUs in its latest Compute Supercluster saw Wells Fargo doubling down on an ‘Overweight’ rating, with a price target of $205 — which would represent a 24.81% upside from the current stock price.
Although various industry partners highlighted how AMD products are and will continue to be integrated into their operations, it seems as if investors were expecting new arrivals.
AMD’s future outlook
Although the immediate reaction was negative, investors and traders should not get ahead of themselves. While YTD price action can’t compare with Nvidia, AMD has had a decent year in terms of stock price — this current dip might very well be profit-taking.
The company remains a good value play — it estimates that data center accelerators, an area where it can rival Nvidia due to similar inference benchmarks, will experience a 60% compound annual growth rate by 2028.
Per Vivek Arya of Bank of America (NYSE: BAC), even securing 10% of the AI market by 2026 would provide AMD with an additional $5 billion in sales, increasing earnings per share (EPS) from current projections of $7.37 on an annual basis to $8 – $9.
A more significant catalyst, either bullish or bearish, along with concrete, actionable insights, is expected in the company’s next earnings call, due October 29.
