Advanced Micro Devices (AMD) has long trailed behind Nvidia in the AI chip market, but a recent breakthrough in efficiency could change the dynamics. DeepSeek, a Chinese AI startup, has unveiled a powerful language model that runs on less advanced chips, challenging the notion that high-end hardware is necessary for cutting-edge AI.
This development raises questions about AMD’s chances of catching up with Nvidia in the AI chip race. One top investor, JR Research, remains skeptical, citing AMD’s cautious outlook and lack of clarity on AI revenue. The investor notes that AMD did not provide a clear projection for expected AI revenues during its recent Q4 2024 earnings call.
In contrast, hyperscalers are increasing their investments in AI with over $300 billion worth of capex announced for 2025. This has led to pressure among these mega tech companies to invest with high conviction in AI opportunities. However, AMD appears not to be aggressively pursuing this market, unlike Nvidia, which has moved into full-volume production for its Blackwell architecture.
Despite this, Wall Street is cautiously optimistic about AMD’s prospects, with 24 Buy ratings and an 11 Hold rating, giving the stock a Moderate Buy consensus. The average price target of $148.03 suggests that AMD could climb 34% from here if bulls are correct.
Source: https://www.tipranks.com/news/the-chase-to-catch-nvidia-is-fading-says-top-investor-about-amd-stock