Does Nvidia and Intel’s Chip Partnership Alter the Competitive Outlook for AMD (AMD) in AI Markets?

• Nvidia and Intel recently announced a partnership to co-develop custom data center and PC chips, with Nvidia investing US$5 billion in Intel, highlighting their aim to jointly challenge core markets served by Advanced Micro Devices (AMD).
• This development draws heightened attention to the intensifying competition among major semiconductor players, as AMD maintains a strong focus on rolling out new AI, data center, and edge computing technologies through fresh alliances and product innovation.
• We'll look at how this Nvidia-Intel collaboration influences AMD's investment narrative, especially regarding competitive risks in the AI market.

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Advanced Micro Devices Investment Narrative Recap

To own AMD stock today, you need to believe that the company’s leadership in AI, data center, and edge computing will power sustained growth despite competitive pressure from both established and emerging semiconductor rivals. The latest Nvidia-Intel partnership ramps up the rivalry but does not materially shift the most important short-term catalyst for AMD: a successful ramp of Instinct AI accelerators and EPYC CPUs within cloud and enterprise segments. The primary risk remains that this heightened competition could pressure AMD’s pricing and margins in the near term. Recent announcements such as AMD’s collaboration with VDURA to deliver a scalable GPU reference architecture for demanding AI workloads are especially relevant. This move aims to cement AMD’s role in AI hosting by addressing a key pain point, maximizing utilization and efficiency of high-performance Instinct GPUs. As this unfolds, product adoption and margin performance will be critical signals for investors tracking AMD’s progress against evolving industry threats. On the other hand, investors should also know that, while AMD has many growth avenues, there are ongoing concerns about…

Read the full narrative on Advanced Micro Devices (it's free!)

Advanced Micro Devices' outlook anticipates $46.2 billion in revenue and $9.0 billion in earnings by 2028. This implies an annual revenue growth rate of 18.5% and a $6.8 billion increase in earnings from the current $2.2 billion.

Uncover how Advanced Micro Devices' forecasts yield a $184.67 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Lowest analyst estimates tell a more cautious story, warning that if issues like export restrictions and manufacturing bottlenecks hit hard, AMD's revenue could grow at just 14.8 percent annually and profit margins may struggle. Your outlook may change, so it’s valuable to weigh a range of forecasts and ask how new developments could shift expectations.

Explore 112 other fair value estimates on Advanced Micro Devices - why the stock might be worth 19% less than the current price!

Build Your Own Advanced Micro Devices Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Advanced Micro Devices research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Advanced Micro Devices research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Advanced Micro Devices' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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