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AMD’s new AI chip will go into production later this year.
Justin Sullivan/Getty Images
Advanced micro-systems
‘Big chip launch may have left investors uninspired, but semiconductor company can still argue
Nvidia
and be an AI winner, analyst says.
The stock fell 3.6% on Tuesday after AMD (ticker: AMD) chief executive Lisa Su unveiled the company’s new AI chip, the MI300X. Customers will begin testing the technology in the third quarter and production will ramp up in the fourth quarter, she said at an event in San Francisco.
Stocks are still up more than 90% so far in 2023, benefiting from the heightened interest and hype around artificial intelligence.
KeyBanc Capital Markets analysts, led by John Vinh, said investors may have been disappointed that AMD did not announce
Microsoft
(MSFT) as a customer of the new chip.
However, Vinh said that was an “unrealistic expectation” given that the chip won’t start being sampled by customers until the third quarter.
Another concern may be that AMD hasn’t been able to make the same performance claims as
Nvidia
(NVDA), he said, adding that the company was always ready to gain market share as an alternative.
Analysts remain bullish on the stock, reiterating an overweight rating with a price target of $150, implying a 20% upside from Tuesday’s closing price. “Overall, we thought this was a constructive event and maintain that AMD is a major beneficiary and share gainer when it comes to generative AI,” they said.
The stock rose 1.6% in premarket trading on Wednesday.
Write to Callum Keown at callum.keown@barrons.com