The U.S. is currently home to 12 publicly listed companies worth $1 trillion or more. Semiconductor giant Advanced Micro Devices (NASDAQ: AMD) joined that exclusive club in September, but its stock has since declined by 25% from its peak, so the company is now valued at just $797 billion (as of the market close on Nov. 4).
AMD has become one of Nvidia‘s (NASDAQ: NVDA) top competitors in the market for data center graphics processing units (GPUs), which are the primary chips used in artificial intelligence (AI) workloads. Concerns about the sustainability of the AI infrastructure spending boom sparked the downside in AMD stock, but the company’s operating results for the third quarter (ended Sept. 30) suggest sales won’t be slowing down anytime soon.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
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Demand is soaring for AMD’s data center chips
AMD launched its first dedicated AI data center GPU in 2023, and it was called the MI300X. It lagged Nvidia’s original H100 GPU in terms of performance, but major tech companies like Microsoft, Meta Platforms, and Oracle thought it was a good alternative in the face of industrywide supply shortages.
AMD has since launched several new generations of its flagship GPU, and it has closed the gap to the competition. The company says its latest MI450 Series chips can be 15% more powerful and 30% more energy efficient than anything else on the market when installed in its fully integrated Helios data center rack. Helios includes specialized central processing units (CPUs), high-bandwidth memory, and networking components to extract the most processing power from every GPU.
AMD started shipping MI455X GPUs and Helios racks to a star-studded list of customers during the third quarter, which included Anthropic, OpenAI, Microsoft, Meta, and Oracle. OpenAI and Meta each plan to deploy 6 gigawatts’ worth of computing capacity over the next few years using AMD’s chips, and while they are starting with the MI450 Series, they will be big buyers of every future generation that follows.
In fact, AMD is already engaging customers regarding the MI500 Series and MI600 Series, which will deliver further leaps in performance.
AMD’s third-quarter data center revenue nearly doubled
AMD generated $13.4 billion in revenue across its three core business segments during the third quarter, which was a 45% increase from the year-ago period. But the data center segment alone accounted for $8.5 billion of that total, and it grew by a whopping 97%.
