- Date : 16/06/2023
- Read: 4 mins
Nvidia and AMD are locked in a fierce stock market battle as they vie for supremacy in the AI era, particularly with the rise of ChatGPT.
- Both stocks have surged this year, on the back of AI advancements
- The introduction of AMD's M1300X chip as a rival to Nvidia's H100 in the AI chip market.
- Potential partnership with Amazon Web Services (AWS) offers a significant opportunity for AMD.
- It remains an uphill battle for AMD, given Nvidia’s market dominance.
In the rapidly evolving era of AI and ChatGPT, two prominent players, Nvidia and AMD, are vying for dominance in the stock market. Both companies have recently made significant strides in the AI chip market, aiming to capture a share of the burgeoning demand.
AMD’s new AI chip – the MI300X
AMD unveiled its new AI-enabled chip, the M1300X, positioning it as a direct rival to Nvidia's chipsets, particularly the widely used Nvidia H100. The M1300X chip, designed to cater to large language and advanced AI models, boasts a maximum memory capacity of 192 GB, surpassing Nvidia's H100 chip's limit of 120 GB. While AMD has not yet announced the pricing for its chipset, it is expected to offer strong competition to Nvidia's offerings, which are priced at around USD 30,000.
Does AMD have a big-name customer for its AI chip?
Amazon Web Services (AWS), the world's leading cloud computing provider, is reportedly considering adopting AMD's new AI chips in its services. However, no final decision has been made public. This move by AWS could provide a significant opportunity for AMD, challenging Nvidia's dominance in the AI chip market.
Also Read: ChatGPT continues to amaze users
AMD vs. Nvidia: How will it play out in the stock market?
Financially, Nvidia reported a 13% decline in revenue compared to the previous year but experienced growth in its data centre and AI chip business. Conversely, AMD's Q1 revenue dropped by 9% year-on-year, accompanied by a net loss. Despite these fluctuations, analysts hold varying views on AMD's prospects. Some believe that AMD's server processors can take substantial market share from Intel's DCAI business, while others perceive AMD's efforts as somewhat late compared to competitors in the AI market.
Analysts estimate the share price of AMD to touch at least USD 145 from the current USD 120 levels in the near-term. While AMD’s stock price has more than doubled since January 2023, it is still considerably behind Nvidia which has also seen its stock price increase – by 170% in the corresponding period. It is interesting to note that when AMD announced its AI chipset, its shares closed down, while Nvidia’s share price rose due to a lack of pricing data, potential customers and sales plan from the former.
The stock market implications of this competition are significant. As AI chips become a bright spot in the semiconductor industry, AMD's entry into the AI chip market could potentially disrupt Nvidia's dominance, which currently commands over 80% of the market share, according to analysts.
In conclusion, Nvidia and AMD are engaged in a fierce battle in the stock market, each striving to dominate the AI chip market in the era of AI and ChatGPT. AMD's advancements, including the introduction of the MI300X, pose a formidable challenge to Nvidia's market dominance – provided it can get big-name customers like AWS onboard. The outcome of this battle will shape the future of AI chip technology and have a significant impact on the stock market landscape.
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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.