AMD Soars as AI Chip Sales Prediction Bodes Well for Rivalry with Nvidia

A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)
A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)
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AMD Soars as AI Chip Sales Prediction Bodes Well for Rivalry with Nvidia

A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)
A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)

Shares of Advanced Micro Devices jumped 8% on Wednesday, after an upbeat AI chip sales forecast signaled the company was making progress in its bid to catch up with market leader Nvidia.

The optimism over AI chip sales helped ease worries about a disappointing fourth-quarter forecast and put it on course for market value gains of nearly $13 billion, based on the $106.41 share price.

CEO Lisa Su on Tuesday provided a 2024 sales forecast for the first time for the MI300 chips, designed to compete against the advanced H100 chips sold by Nvidia.

She projected annual sales of more than $2 billion, and raised the chip's current-quarter revenue expectations by $100 million.

That would make the MI300 the fastest product to ramp to $1 billion in sales in AMD's history.

"Hitting this milestone is likely a key first step towards proving AMD is the clear second source to Nvidia in the AI accelerator market," said analysts at TD Cowen.

The CEO also said the MI300 chips had won commitments from "multiple, large hyperscale customers", a term that refers to large tech and cloud computing companies.

AMD's shares have gained 61% this year through last close, but those gains pale in comparison to Nvidia's 184% rally.

Still, the conservative forecast and weakness in several of AMD's markets led at least 18 analysts to cut their price targets on the stock, pushing down the median view to $130, per LSEG data.

"Forecasts were below our prior estimates ... and it's quite possible that such estimates could be conservative," Morningstar analyst Brian Colello said.

While the PC market has been seeing signs of recovery, a weak gaming market and decline in demand for programmable chips used by industries such as wireless communications, healthcare and automotive have been a drag.



Apple Names Insider Sabih Khan as COO

The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)
The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)
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Apple Names Insider Sabih Khan as COO

The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)
The Apple logo is seen on the Apple store at The Marche Saint Germain in Paris, France July 15, 2020. (Reuters)

Apple on Tuesday named insider Sabih Khan as its chief operating officer, taking over from Jeff Williams, as part of a long-planned succession.

Khan, who has been with Apple for 30 years and is currently the senior vice president of operations, will take on the new role later this month, the iPhone maker said in a statement.

Before joining Apple's procurement group in 1995, he worked as an applications development engineer and key account technical leader at GE Plastics.

Williams will continue to report to CEO Tim Cook and oversee the company's design team and Apple Watch.

The design team will report directly to Cook after Williams retires late in the year.