Trade Alert: Bought AMD $150 Pre-Market
Data Center revenue increase of 115% confirms demand for AI GPU’s. There’s always concern that AMD is far behind Nvidia. I believe there is enough room for both – Nvidia’s GPU’s sell for over 30K, AMD’s offering theirs’s for 15K. The performance difference is not 50%! AMD over time, will get 20% of the AI GPU market from the 4% it has today. That’s not a small thing. Nvidia’s biggest advantage is CUDA – their closed operating system, which locks customers into using Nvidia GPUs. AMD bought Silo AI, which is known for its pool of AI talent, with experience in training large language models on AMD Instinct GPUs to close that gap and compete with Nvidia.
Data center revenue was $2.83 billion, up 115% YoY and 21% QoQ. For reference, in Q1, AMD reported data center revenue growth of 80% YoY and 2.4% QoQ, so this is a rather sharp acceleration in just one quarter. Per management this was “driven by the steep ramp of Instinct MI300 GPU shipments and a strong double-digit percentage increase in EPYC CPU sales.” There is expected to be strong growth next quarter in the DC segment.
AMD’s stock tends to be very volatile as it struggles through catching up with Nvidia and handling two cyclical segments like gaming and pcs – we’re down some 30% from its previous high of $227 – it’s never a smooth ride with AMD! But the price is right, and I do have a 3–5-year horizon which will yield good returns.