AMD: Second Fiddle As AI Competition Intensifies - Mixed Prospects Ahead
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Advanced Micro Devices (AMD) faces challenges in competing with NVIDIA's AI chip dominance, leading to discounted stock prices and underwhelming forward guidance. The transition to custom ASICs by hyperscalers may cause AMD to miss out on the AI capex boom, affecting its operating margins and pricing power despite projected growth through FY2026.
November 06, 2024 | 2:15 pm
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AMD is struggling to compete with NVIDIA in the AI chip market, leading to discounted stock prices and underwhelming forward guidance. The shift to custom ASICs by hyperscalers may result in AMD missing out on the AI capex boom, impacting its operating margins and pricing power.
AMD's inability to compete with NVIDIA's AI chip dominance and the shift to custom ASICs by hyperscalers are likely to negatively impact its stock price in the short term. The company's underwhelming forward guidance and affected operating margins suggest a lack of pricing power and delayed AI monetization, despite projected growth.
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