AMD and Cerebras Seize Opportunities in Inference Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 8 hours ago
0mins
Source: NASDAQ.COM
- Market Opportunity: AMD is poised to capitalize on a significant market opportunity in inference and agentic AI, with projected growth of $120 billion in the coming years, as its GPU chip design is better suited for inference applications despite Nvidia's long-standing dominance in the graphics processing unit market.
- Investment Dynamics: Ark Investment's Cathie Wood recently trimmed her stake in AMD but still considers it her second-largest investment, indicating confidence in AMD's future growth potential while increasing her investment in Cerebras, reflecting a focus on emerging technologies.
- Inference Technology Advantage: Cerebras achieves 15 times the inference speed of leading GPUs by integrating static random access memory (SRAM) directly onto its chips, although its products face cost challenges due to their large size and manufacturing complexity, they still have the potential to disrupt the inference market.
- Competitive Landscape: As agentic AI rises, the ratio of CPUs to GPUs is rapidly narrowing, expected to drop from 8:1 for training to 4:1 for inference and ultimately 1:1, with AMD's leadership in this area likely to drive greater market share in the fast-growing sector.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to fall
33 Analyst Rating
25 Buy
8 Hold
0 Sell
Strong Buy
Current: 518.090
Low
210.00
Averages
289.13
High
377.00
Current: 518.090
Low
210.00
Averages
289.13
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing and artificial intelligence (AI). Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes AI accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Investor Sentiment: The significant outflow from this ETF reflects market concerns regarding its portfolio, which may prompt management to reassess its investment strategy to restore investor confidence.
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See More
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- R&D Investment Priority: Despite the dividend hike, Nvidia prioritizes R&D, planning to invest heavily in the coming years to support growth in AI, especially after launching its Vera CPU, which is expected to tap into a $200 billion addressable market.
- Long-Term Growth Potential: While Nvidia's dividend profile may not compare favorably to traditional high-dividend stocks, it remains a highly attractive long-term growth stock, with projected CPU revenues of around $20 billion by year-end, capitalizing on the ongoing growth in AI infrastructure spending.
See More
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- Intensifying Market Competition: With competitors like Cerebras Systems emerging, Nvidia faces increasing pressure in the AI industry, especially as the focus shifts from training to inference, necessitating continuous innovation to uphold its market position.
- Long-Term Growth Potential: Although its dividend appeal is limited, Nvidia is still regarded as a high-quality long-term growth stock, with projected CPU revenues reaching $20 billion by year-end, highlighting its potential in emerging markets and confidence in future growth.
See More
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- Strategic Cooperation Opportunities: AMD CEO Lisa Su's meeting with Chinese Vice Premier He Lifeng during her visit indicates AMD's intent to deepen cooperation in the Chinese market, which could potentially open up more business opportunities despite fierce competition and regulatory challenges.
- Ecosystem Challenges: Although AMD promoted its open-source software stack ROCm at its Shanghai developer event, its software ecosystem remains less mature compared to Nvidia's, which may limit AMD's further penetration into the Chinese market, particularly in the AI sector.
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See More
