AMD’s AI positioning ‘feels like’ one in servers with Intel a decade ago, Citi analyst remarks
Nvidia Corp. stands to command “at least 90%” of market share in the AI chip market with Advanced Micro Devices Inc. poised in second place, and to one analyst, that’s reminiscent of AMD and Intel Corp. in servers a decade ago.
In a Monday note on AMD’s AMD, +0.36% stock, Citi Research analyst Christopher Danely said a third-party assessment of AMD’s and Nvidia’s NVDA, -0.76% previous generation AI chips — the MI250 and the A100, respectively — found AMD’s hardware was about 80% as fast as Nvidia’s.
“We expect a similar advantage of Nvidia’s H100 vs AMD’s MI300 and we continue to expect Nvidia to have a substantial advantage in AI performance and share versus AMD going forward given superior speed and ecosystem,” Danely said in maintaining his neutral rating and $120 price target on AMD.
Nvidia shares have rallied 186% in 2023 on the promise of cashing in big on artificial intelligence models like Microsoft Corp. MSFT, -1.60% -backed OpenAI’s ChatGPT, with shares of AMD close behind with a 72% gain.
Both Nvidia and AMD have launched new AI chips this year, Nvidia in March and AMD earlier in the month.
“We expect Nvidia to have at least 90% share of AI graphics going forward as the scenario is reminiscent of Intel INTC, +2.79% vs AMD ten years ago when Intel had better performance and ecosystem and over 90% share,” the Citi analyst said.
Both Nvidia and AMD shares were down more than 1% Monday as the PHLX Semiconductor Index SOX, +2.06% rose more than 1%. In comparison, the S&P 500 index SPX, +0.24% was flat and the tech-heavy Nasdaq Composite Index COMP, +0.18% was down 0.3%.