AMD Poised to Capture Share in AI Market

An optimistic perspective on Advanced Micro Devices Inc. (AMD) highlights its potential to thrive in the lucrative artificial intelligence (AI) market. According to Roth MKM analyst Suji Desilva, AMD's strategic positioning in the AI sector is one of the key reasons why he initiated coverage on the stock with a buy rating and an impressive $125 price target.

Desilva elaborated on AMD's competitive advantage, stating that their MI300A, which tightly integrates advanced graphics-processing-unit capabilities with multiple Zen-based central-processing-unit cores, is ideally suited for high-performance AI inference and mid-range training. Additionally, Desilva praised AMD's MI300X chip, which boasts dense CDNA-based CPU capability, high memory density, and high data throughput, making it an excellent choice for newer generative AI training workloads that involve large language models (LLMs).

Desilva further emphasized that AMD's Genoa processor showcases significant upgrades to its specifications, making it an ideal option for AI workloads. This improvement positions the company favorably to gain market share.

Broader market dynamics also play in favor of AMD. The company has been steadily gaining traction in the data-center infrastructure market and is expected to continue making progress among enterprise customers.

Additionally, while the post-pandemic PC market has been sluggish, AMD is set to benefit from a rebound in this category as well as in the gaming business. Desilva predicts a gradual recovery in these segments over the next few quarters.

As evidence of investor confidence, AMD shares experienced a 4.2% increase in morning trading on Tuesday. This surge is indicative of a positive day for the Nasdaq Composite Index, up 2.2%, and the PHLX Semiconductor Index, up 3.5%.

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