Advanced Micro Devices, Inc. (NASDAQ:AMD) CEO Lisa Su highlighted the start of an artificial intelligence supercycle during the Goldman Sachs Communacopia & Technology Conference on Monday.
What Happened: Su highlighted that AMD has accelerated its AI roadmap, aiming to release new AI chips annually. The company plans to unveil the MI325 AI chip later this year, followed by the MI350 in 2025 and the MI400 in 2026, challenging NVIDIA Corp. (NASDAQ:NVDA), reported Yahoo Finance on Monday.
Su stated, "We believe we can have a very significant piece of the training and inference of these large language models." The MI300x, launched last year, features 192GB of memory and 153 billion transistors, making it suitable for training large language models like OpenAI's ChatGPT.
AMD anticipates $4.5 billion in sales from the MI300x in 2024, a significant increase from $100 million in AI-related chip revenue last year. Jefferies analyst Blayne Curtis noted that AMD's MI300 guidance raise is positive, with expectations of $5 billion in sales this year.
Second quarter sales and earnings for AMD rose 9% and 19% year over year, respectively. The company projects a 16% year-over-year growth in third-quarter revenue. Su emphasized, "AI is a much larger cycle than I would have expected five years ago," according to the report.
In an interview with Tom's Hardware, AMD's computing and graphics chief, Jach Huynh, underscored the company's focus is on AI GPUs. According to AMD's new strategy, it has merged its RDNA gaming graphics and CNDA data center efforts into a new one called "UDNA" that has AI at the center of it.
When asked about flagship gaming GPUs that AMD was chasing, Huynh explained that the priority is to "build scale" first to take on rival Nvidia, instead of focusing only on the flagship segment.
Why It Matters: The announcement from Su comes at a crucial time for the semiconductor industry. Intel Corp. (NASDAQ:INTC) is reportedly under pressure to overhaul its AI strategy to keep pace with competitors like AMD and Nvidia. Intel is evaluating significant strategic shifts to regain its competitive edge in the AI chip market.
Additionally, CNBC's "Mad Money," host Jim Cramer recently highlighted that Intel is "getting whacked" by AMD, emphasizing the latter's growing dominance in the AI sector.
Earlier this year, Su had already indicated that AI is the "most important" technology of the last 50 years and predicted that "everyone" would want an AI PC in the future.
Price Action: Advanced Micro Devices closed at $138.15 on Monday, up 2.83% for the day. In after-hours trading, the stock edged higher by 0.47%. Year to date, AMD's stock is down 0.31%, according to data from Benzinga Pro.