summation
- AMD is steadily expanding its market share in the server CPU market.
- AMD's AI chips are also scheduled to be sold in earnest starting at the end of this year, and next year's data center sales are expected to be $1.9 billion.
- It is only mentioned as an Nvidia-related stock, but it is expected that there will be a change in the stock price that has been ignored too much.
Opportunities come and go
It seems that companies other than NVIDIA are completely excluded from data center issues, but this is just a difference in the amount of issues, and AMD is also doing well. This is the server CPU market dominated by Intel. With the success of Genoa, the 4th generation product of the EPYC series, AMD's server CPU lineup released in 2022, Server CPU share, which was 22% at the beginning of 23, was 30% at the end of 23..
AWS , Alibaba, Microsoft Azure , and oracle Announced new instances utilizing EPYC processors. Among them, Oracle, a database technology company, announced MySQL Heatwave based on the EPYC processor, indicating that it will be used for transaction processing, data analysis, and machine learning across cloud services. AMD plans to release Genoa-X (3D-V-cache enhancement, high-performance version) released in 2023. Bergamo (cloud computing optimization) announced that it will join in driving performance in the second half of the year, showing that it has a vision for the server CPU market.
There is a gap for AMD in the AI semiconductor market
At least as of now, there seems to be no worthy opponent compared to NVIDIA. However, that is the current standard. AMD is a company that prevented Intel's dominance, which seemed impossible, and is a rival to NVIDIA in the graphics card arena, which can be said to be a relative of AI semiconductors.
There are other companies that are not happy with Nvidia’s dominance. This is a cloud company that is a customer of NVIDIA. As mentioned in a previous NVIDIA analysis article, cloud companies are feeling the burden of data center investment costs, and have been investing in and designing AI-specific semiconductors for several years already. Companies such as Google and Tesla are already making some use of this. This ultimately means that Nvidia is also their competitor and has no intention of completely handing over pricing power. This aspect will be an opportunity for AMD.
Nvidia's production capacity is limited and is expected to reach $2 trillion by 2030. Considering the tremendous growth rate of the AI market, opportunities to enter the market will open even if AMD's products reach a certain level. Sales in new sectors can greatly contribute to AMD's performance, and there may also be changes in the stock price, which has been too neglected in the AI rally.
AMD vs NVIDIA stock price after Chat GPT issue 2022. 09 - Present (Source: Yahoo Finance)
AMD's counterattack is just beginning
AMD announced that it plans to sell the MI300 chip in the fourth quarter. The detailed specifications of the chip were not revealed, but in the earnings announcement, it was stated that "AMD's AI chip is almost the same speed as Nvidia's and is easy to implement." MI300's sales estimate for next year is $1.9 billion, but as AMD announced, if it shows performance and convenience comparable to NVIDIA, demand could increase significantly. This is because there is a lot of demand to use better, cheaper AI chips. AMD has already formed partnerships with many cloud companies such as Meta (Facebook) and Amazon, so there is ample room for actual performance to exceed guidance.
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