AMD GPUs Purchased by Customers to Boost Competition and Price Check NVIDIA, Channel Checks Reveal Major Inventory Increase

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AMD’s Position in the AI GPU Landscape

Advanced Micro Devices (AMD) has made notable strides recently in altering the prevailing view of its AI GPU capabilities compared to NVIDIA, which remains the benchmark in the industry. Despite these improvements, a cautious outlook from Wall Street persists, with analysts advocating a prudent wait-and-see strategy regarding AMD’s near-term performance.

Analyst Insights and Stock Predictions

Truist Securities analyst William Stein has reiterated a ‘Hold’ rating on AMD, setting the price target at $111 per share. This target reflects a pessimistic outlook, suggesting a potential downside of approximately 20% from the current trading price of around $137.70.

Stein emphasized the ongoing discussions about whether AMD’s clients are simply acquiring its products to foster competition and benchmark against NVIDIA, rather than a genuine preference for AMD’s technology. He leans towards the notion that customers are hedging their bets by purchasing from AMD.

AWS Controversy Clarification

Recently, there was a controversy regarding AMD’s customer list, particularly with Amazon Web Services (AWS).The Amazon logo was briefly featured and then removed from AMD’s marketing materials. According to Stein’s conversations with AMD leadership, Amazon prefers to reserve announcements about partnerships for their own events rather than through third-party promotions.

Concerns Over AMD’s Inventory Levels

Stein’s analysis also revealed a troubling “significant inventory build”at AMD, which he finds perplexing. With substantial uncertainties clouding AMD’s AI GPU segment, the Truist analyst refrains from making strong predictions about whether upcoming quarterly results will serve as a catalyst for excitement or disappointment.

Upcoming Innovations and Product Launches

In a recent development, AMD introduced its MI350 series GPUs, powered by its fourth-generation Instinct architecture, set for release in the third quarter of 2025. These GPUs promise a substantial increase in AI computing performance, boasting a fourfold increase in AI compute power and a thirty-fivefold boost in inferencing capabilities.

Additionally, AMD has rolled out the latest version of its ROCm platform, now at version 7. This open-source platform is designed to optimize the performance of AMD GPUs, reportedly improving inference performance by 3.5 times and training performance by three times compared to its predecessor.

Future Prospects with Helios AI Rack Solution

AMD’s innovative Helios AI rack solution, which integrates MI400 GPUs with Zen-6-based Venice CPUs and Vulcano NICs, is anticipated to be launched in 2026. Furthermore, the company has hinted at an advanced successor to the Helios, expected to arrive in 2027, featuring MI500 GPUs, Verano CPUs, and Vulcano NICs.

Financial Projections and Market Impact

The introduction of the MI350 GPUs is expected to significantly impact AMD’s revenue performance in the latter half of 2025. Cantor Fitzgerald analyst C. J.Muse forecasts that AMD could achieve approximately $6 billion in AI-related revenues during this period.

As the landscape of AI technology continues to evolve, AMD aims to solidify its position amidst fierce competition, with market analysts closely monitoring its developments for future insights.

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