AMD's GPU Sales Soar, Surpassing $5 Billion Amid AI Market Demand Surge

October 31, 2024
AMD's GPU Sales Soar, Surpassing $5 Billion Amid AI Market Demand Surge
  • AMD'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.

Summary based on 2 sources


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