Proactive Investors - A day after Advanced Micro Devices (NASDAQ:AMD) Inc (NASDAQ:AMD, ETR:AMD) flexed its new MI300 silicon artificial intelligence (AI) chip, analysts at Wedbush called it a win for the AI industry as a whole.
The MI300 is equipped with 192 gigabytes of high-performance memory called HBM3 and is expected to be less expensive than the graphics processors made by Nvidia, which currently dominates the AI chip industry.
“We'd note that higher memory content and bandwidth (2.4X the capacity and 1.6X the bandwidth) play a key role in enabling AMD's performance,” the analysts wrote. “Oracle (NYSE:ORCL) and Meta both joined MSFT on stage lifting the number of announced major AMD MI300 cloud customers up to three.”
CEO Lisa Su told attendees at an investor event Wednesday that the company expects the AI chip market to reach $400 billion by 2027, which caught the attention of Wedbush.
“We generally view AMD’s commentary yesterday as positive not just for AMD, but for the broader AI ecosystem including NVDA,” the analysts wrote. “$400B in accelerator revenue in 2027 is good for everyone and particularly NVDA.”
They continued, “Even if AMD proves to have significantly overshot the mark, the sheer magnitude of the outlook can only be seen as supporting robust investor expectations for future AI requirements. And given NVDA’s dominance in the market today, even if AMD offers a robust alternative (and certainly management made that case yesterday), NVDA should still end up a winner (if not the winner).”
Wedbush reiterated its Outperform rating and $130 price target for AMD. Shares of the company traded 8% higher Thursday afternoon at $126.29.