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Advanced Micro Devices (AMD) will report Q3 earnings after the close today, and market attention will be focused on the rollout of the company’s new MI300 artificial intelligence (AI) accelerator chip, seen as a competitor to Nvidia’s (NVDA) H100 chip. Both chips are used in AI applications that make data manipulation more effective in a process called training. AMD’s new MI 300 AI chip is expected to be released sometime in the fourth quarter.
Nvidia currently owns most of the market share for AI applications with its H100 chip, which helped turn it into the first trillion-dollar semiconductor company. However, the release of AMD’s new AI MI300 accelerator chip is seen as key to the direction of the stock. In an earnings call later today, AMD CEO Lisa Su is expected to provide details on AMD’s newest product along with how the company is navigating an improving environment for personal computers and tepid demand for server chips, key markets for the company.
Shares of Advanced Micro Devices are up +48% this year, stronger than the +26% gain in the Philadelphia Semiconductor Index ($SOX), but well below AMD’s 1-3/4 year high posted in June when AI exuberance was rampant. Last week, Intel’s (INTC) quarterly earnings report showed that while demand in the PC market is improving, the inventory overhang still lingers in the server market, a key area where AMD has gained market share and added profits. AMD CEO Su has credited AMD’s new products with taking away market share from Intel.
AMD CEO Su will likely strike a balance in today’s earnings conference call between showing excitement about the MI300 chip and keeping a lid on expectations about how quickly the new product will contribute to its revenue stream. In an earnings call in August, the new MI300 chip received close to 40 mentions, although Su declined to provide specific dollar targets. Sanford C. Bernstein said that while the MI300 product “will be the story” into next year, “we do not expect real volume until the second half of next year.”
AMD is attempting to gain market share in the chip market for AI applications, where Nvidia is the clear leader. The two companies are the major provider of graphic chips for gaming PCs. When tuned for data center work, that graphic chip excels at crunching through AI training workloads because of the ability of graphics processing units (GPUs) to do multiple streams of work simultaneously in so-called parallel computing. AMD CEO Su back in August said the opportunity for chipmakers in AI systems is only at the early stages, and she projects that the market for accelerators such as the MI300 will reach $150 billion by 2027.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
