AMD's GPU Sales Soar, Surpassing $5 Billion Amid AI Market Demand Surge
October 31, 2024AMD's stock price has more than doubled since mid-2022, reflecting strong investor confidence in the company's growth prospects within the AI sector.
However, following the recent report, AMD's stock price dropped by over 10% on October 30, 2024, indicating market volatility.
AMD's GPU sales are set to surpass $5 billion in 2024, reflecting a surge in demand from the AI data center market.
In the third quarter of 2024 alone, AMD reported GPU sales exceeding $1.5 billion, significantly raising expectations from an earlier forecast of $2 billion for the entire year.
Remarkably, AMD's AI GPU business, which has been operational for less than a year, has already reached a scale comparable to its established CPU business.
CEO Lisa Su highlighted this shift, indicating that AMD's GPU segment is approaching the significance of its CPU division, marking a pivotal change in the computing landscape.
Despite a decline in gaming revenues year-on-year, AMD's overall revenue growth is predominantly driven by its AI-related products.
While GPU sales are on the rise, analysts emphasize that CPUs remain essential for AI workloads, as inference tasks typically require both CPU and GPU resources.
Bank of America estimates that AMD currently holds about 5% of the AI chip market, with demand expected to grow by 50% to 100% in the upcoming year, potentially leading to significant growth for the company.
Morgan Stanley analysts suggest that AMD's revenue is largely derived from inference applications, estimating its market share to be above 10%, although this may be optimistic given its smaller customer base.
Looking ahead, UBS analysts caution that 2025 may serve as a transition year for AI data centers and GPU sales, predicting that sales will peak in 2026.
During AMD's Q3 2024 earnings call, Lisa Su projected that the total addressable market for AI accelerators in data centers will grow over 60% annually, potentially reaching $500 billion by 2028.
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