Wall Street May Not Be Convinced, but AMD's Artificial Intelligence (AI) Business Is Set to Skyrocket
The booming demand for artificial intelligence (AI) chips has sent shares of Advanced Micro Devices (NASDAQ: AMD) flying in the past year, even though the chipmaker's AI-related business had not yet gained traction in 2023. That's probably because investors didn't want to miss out on a chance to capitalize on this fast-growing market currently being dominated by Nvidia.
AMD was late to the AI chip market in 2023, with tech giants lining up to buy Nvidia's graphics processing units (GPUs) to train large language models such as ChatGPT. However, AMD did manage to squeeze into this lucrative market that's expected to generate a massive $384 billion in annual revenue in 2032, clocking a compound annual growth rate of 38%. AMD management said last year that its efforts in this segment of the business should start to pay off in 2024.
So far, Wall Street isn't satisfied with AMD's AI-related revenue guidance for the year (it fell behind expectations). However, there is more than what meets the eye and a closer look at the company's AI business will tell us that it could ramp up significantly this year.
Source Fool.com
Advanced Micro Devices Inc. Stock
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