AMD Should Be Valued As A Software-First Chip Company

Summary:

  • Nvidia Corporation dominates AI datacenter GPU sales, but AMD is rapidly enhancing its software and hardware capabilities to capture market share, recommending a Strong Buy on AMD.
  • AMD’s acquisitions of SiloAI and ZT Systems, along with ROCm software updates, aim to compete with Nvidia’s CUDA and expand AMD’s TAM significantly.
  • AMD’s projected 20% CAGR in revenue through FY25, improving margins, and undervaluation compared to peers suggest strong upside potential, with a price target of $213.
  • Risks include AMD’s inventory levels and competition from Nvidia, but AMD’s end-to-end AI strategy and rack-scale solutions present a compelling growth opportunity.

AMD headquarters in Santa Clara, California, USA

JHVEPhoto

Investment Thesis

Nvidia Corporation (NASDAQ:NVDA) has dominated the sale of GPUs deployed in AI datacenters for the longest time, holding almost a 98% market share in this market segment.

One of the ways Nvidia has held on to


Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


Leave a Reply

Your email address will not be published. Required fields are marked *