Can AMD Compete in the AI Revolution?

Advanced Micro Devices (NASDAQ: AMD) stock has been a fantastic investment over the past five years, as the stock has risen nearly 700%. Much of this return dealt with AMD launching competitive products and getting its finances in check. Now that that transition is over, AMD investors are looking toward a new catalyst to drive the stock higher: artificial intelligence (AI).

While AMD isn't directly competing in this space against massive names like OpenAI, it's products are heavily utilized in AI applications, including training, development, and implementation, making AMD a "picks and shovels" type of investment. Because of that, it will benefit significantly from AI proliferation. However, AMD's latest results don't reflect this theory, and it could be a useful warning signal for AI-focused investors.

AMD has multiple business segments, including data center, client, gaming, and embedded revenue. The data center division is the key area to focus on when trying to discern whether AI is making a difference in AMD's finances. Within its product lines are central processing units (CPUs), graphics processing units (GPUs), and data processing units (DPUs), each a vital piece of equipment when building a data center meant for AI training and implementation.

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Source Fool.com