A chipmaker with a relatively small market capitalization and, therefore, with lots of room for growth, is about to become the backbone of AI with a cutting edge chip that is fast enough to eliminate the need for half the chips AI companies desperately need.

It's Not Too Late - It's Just the Beginning!

The mass adoption of AI has already made a lot of investors very rich so it is understandable that you might feel like you’ve missed the boat - that a historic opportunity has slipped through your fingers - but we are very early in this boom. The first wave of profits is over but, as more and more companies rush to adopt this new breakthrough, the AI boom is going to kick into high gear and these windfalls are only going to accelerate.

Major Shortage Of Powerful AI Chips

AI is transforming everything around us and a new CNBC reports that 495 of the 500 biggest U.S. corporations in are already deploying AI and Wall Street estimates AI will unlock a $200 trillion windfall. That being said, however, the lifeblood of AI depends on powerful AI chips and with the AI boom ramping up, tech companies are scrambling to buy them - thousands of them- but they are currently in very short supply with tech companies being forced to wait almost a year to get their orders filled

The CHIPS Act Hopes To Solve the Crisis

The U.S. government has declared the AI chip shortage a national security issue and recently passed a bipartisan bill to solve this crisis, called the CHIPS Act, by pouring $280 billion into the chip industry.

AMD Is About To Launch An Incredibly Powerful AI Chip

The tech industry MUST develop more powerful chips so they don’t need as many and Advanced Micro Devices (AMD) is hoping its MI300X AI chip - the most powerful AI chip in history with the power of 2.4 times that of Nvidia's top devices in just one chip as well as 1.6 times the memory bandwidth - that it introduced this past June and plans to launch later this year can stymie Nvidia’s H100 ‘Hopper’ graphics processing units (GPU) dominance. When you consider that just one chip can cost as much as $40,000 right now you can see why tech giants like Tesla, Google, and Amazon are desperate for this new technology. AMD CEO Lisa Su states, "We have a GPU that is incredibly powerful; very, very efficient: and we believes it will be a significant winner in the AI market." 

Total Addressable AI Accelerator Market To Grow 5-fold Over Next 4 Years To $150B 

The litmus test for AMD will be whether it can win enough major contracts to eat into Nvidia’s 80% market share. AMD is already in discussions with Amazon’s cloud division AWS to become a potential customer.

Patrick Moorhead, CEO of Moor Insights & Strategy, doesn't believe AMD is going to deliver an immediate knockout blow but, instead, make the investments necessary to compete with Nvidia long-term in the hyperscale cloud AI accelerator market that he forecasts could have a total addressable market of $125bn by 2028. Su is even more optimistic seeing the AI accelerator market growing five-fold between now and 2027, by which time it should be worth $150bn.

To that end, as a starter, AMD announced in early October that it had acquired Nod.ai, an open source AI software provider, to significantly enhance AMD’s ability to provide customers with software that allows them to easily deploy highly performant AI models tuned for AMD hardware. In a press release, AMD SVP Vamsi Boppana said that “The addition of the talented Nod.ai team accelerates our ability to advance open-source compiler technology and enable portable, high-performance AI solutions across the AMD product portfolio. Nod.ai’s technologies are already widely deployed in the cloud, at the edge and across a broad range of end point devices today.”

Bottom Line: Get Positioned

It’s only a matter of time before AMD makes a big splash in the stock market. It is already up 68% YTD so it is anticipated that its stock will take off with the launch of its next-generation AI chip. Now is the time to do your own due diligence and give serious consideration to getting positioned in AMD before its new chip comes to market later this year.

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