Advanced Micro Devices is positioning itself as the main alternative supplier to Nvidia for artificial-intelligence chips for data centers. The question is, what market share is it realistic for AMD to take?
Raymond James analyst Srini Pajjuri noted that current Wall Street expectations appear to be for AMD to ship between 250,000 and 500,000 units of its MI300 AI data-center chip in 2024.
AMD has announced three major customers for its AI chips—Microsoft, Meta Platforms, and Oracle. Pajjuri noted the Street expectations suggest AMD would have about a 15% to 25% share of AI shipments to those customers, with Nvidia taking the rest.
“We…believe that a vast majority of AMD’s 2024 shipments are likely going to Microsoft and Meta. Such a rapid share gain is less common in Data Center and could also attract more aggressive competitive reaction from Nvidia,” wrote Pajjuri.
Pajjuri lowered his rating on the stock to Outperform from Strong Buy, noting the market share assumptions are already close to his bull case for AMD. However, he raised his target price to $195 from $190. AMD shares were down 0.6% at $176.75 in premarket trading.
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