Advanced Micro Devices (AMD) is ramping up for a strong fourth quarter, with plans to release artificial intelligence hardware fit to rival Nvidia's chips. This announcement has sparked a 3.5% increase in after-hours trading for the company.
AMD's bullish fourth quarter forecast
AMD is gearing up for a powerful end of the year, having announced their intention to release AI hardware with the potential to rival the chips produced by Nvidia. This revelation has excited investors and resulted in a significant uptick in AMD shares, with a 3.5% increase observed in after-hours trading. It's clear that the tech industry is watching AMD's moves closely as the year draws to a close.
AMD's MI300 to challenge Nvidia's H100
AMD's secret weapon in this upcoming competition is their MI300 AI accelerator chips. The company plans to significantly ramp up production of these chips in the fourth quarter, presenting a direct challenge to Nvidia's advanced H100 chips. The latter are currently in high demand but short supply, creating an opportunity for AMD to fill this gap in the market and potentially take the lead.
Cloud giants Microsoft and Google have signaled their intent to ramp up spending on data centers in the latter half of this year, with a specific focus on AI chips and infrastructure. This trend could play to AMD's advantage, given their upcoming offering of competitive AI hardware. It's an opportune time for the company to demonstrate the value and effectiveness of their product.
Expected recovery in AMD's revenue
AMD experienced a decline in revenue for both its data center and client businesses, falling 11% and 54% respectively. However, the company remains optimistic, anticipating a double-digit percentage growth for both sectors in the third quarter. This expected growth is thanks to increased demand for its EPYC and Ryzen processors, which have proven popular among customers.