(Bloomberg) — Advanced Micro Devices Inc. suffered the biggest stock drop in more than a month after the company updated its product lineup, a sign that investors were waiting for more payoff from its move into artificial intelligence.
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Shares fell as much as 5.3% to $162 on Thursday, marking the biggest intraday decline since September 3. It followed the unveiling of new chips by Chief Executive Officer Lisa Su at an event in San Francisco, but there were no major changes to the company’s direction. short-term financial prospects.
AMD has emerged as Nvidia Corp.’s biggest competitor. in the lucrative artificial intelligence processor market, and Su argued that its latest chips will surpass some of its rival’s capabilities. Computer systems based on AMD’s MI325X processors will be available soon and will have an advantage over machines with Nvidia’s H100, she said at the event. Using a new type of memory chip in the MI325X will give it better performance when running AI software – a process known as inference – she said.
The Santa Clara, California-based company is trying to break Nvidia’s dominance in so-called AI accelerators – chips that have become essential for the development of artificial intelligence systems. Like Nvidia, AMD has committed to releasing new accelerators every year, accelerating the pace of innovation.
Still, AMD still has a long way to go to match Nvidia, and Wall Street is waiting for signs of progress. That may not come until the company’s quarterly report, which is expected around the end of this month.
Under Su, who just celebrated her 10th anniversary in the top job at AMD, the company has defeated its old nemesis Intel Corp. overshadowed in market valuation. But both companies were caught off guard by how ferociously the industry embraced AI accelerators.
Of the two, AMD has reacted much faster and established itself as Nvidia’s biggest competitor. AMD has set a goal of generating $4.5 billion in revenue from the new type of chips this year, a rapid increase.
Su has said the total market for such chips will reach $400 billion by 2027. On Thursday, she said the company expects that number to reach $500 billion by 2028.
At the event, Su also said the company is launching a new line of server processors based on its “Turin” technology, reinvigorating a market once dominated by Intel.
Computers will be offered for sale with AMD’s fifth-generation EPYC central processing units, or CPUs, she said. The chips have as many as 192 processor cores and can outperform the latest Intel products, she said.
The company said it now has 34% of the market for this category of chips, as measured by revenue. Although Intel still dominates the segment, it once had a 99% share.
Su said she expects continued growth in demand for AI and that the industry is “just beginning” to adopt the new technology.
In addition, Su said that AMD currently has no plans to change the suppliers it uses for advanced manufacturing. But the company wants more geographic diversity in manufacturing and is currently working hard to qualify Taiwan Semiconductor Manufacturing Co.’s new Arizona facility. Su refused to use Samsung Electronics Co. or exclude Intel in the future. She said AMD has an open mind.
“We think it’s important to have geographic diversity,” she said.
AMD has a different strategy than Nvidia and it resonates with customers, Su said. Its larger competitor offers complete systems, including models and software, that AMD believes are closed and proprietary. AMD is much more open to working with other companies, even Intel and Nvidia, she said.
“The difference is that we don’t think we’re the only ones who have good ideas,” she says.
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