AMD releases new AI chip MI325X to challenge NVIDIA's Blackwell, NVIDIA's Blackwell chip is still sold out within the next 12 months.
(Background information: AMD acquires ZT to "undermine NVIDIA"! Morgan Stanley: Quanta, Foxconn and Wiwynn will benefit)
(Additional background: Nvidia involved in "hiding over $1 billion in revenue from GPU sales to miners", US Department of Justice and SEC support class action lawsuit against Nvidia)
In the latest round of product releases, AMD on Thursday, the 10th, launched a brand new AI chip "MI325X", announcing that it will directly challenge NVIDIA's leading position in the high-end GPU field. This chip is expected to enter mass production by the end of 2024, while NVIDIA's competing product "Blackwell" is expected to be put into production in early next year. This head-to-head confrontation undoubtedly makes developers and cloud service providers eager to see how the two companies will compete in the market, as AMD's new AI chip is intended to grab a share of NVIDIA's market share.
Surging demand for high-performance AI chips in the market
With the rapid proliferation of generative AI applications such as ChatGPT and Meta's Llama, the demand for high-performance GPUs is constantly increasing. Currently, NVIDIA is still the dominant player in this field, with over 90% market share. Nevertheless, AMD hopes to capture more market share through its new MI325X chip. AMD CEO Su Zifeng stated:
The performance of the "MI325X" in running the Meta Llama 3.1 model is 40% better than NVIDIA's H200.
Software ecosystem is AMD's main challenge
NVIDIA has long established a strong ecosystem in the AI development field through its programming software platform "CUDA", which poses a significant challenge to AMD. To address this issue, AMD plans to continue investing resources to strengthen its open-source software platform "ROCm", hoping to lower the threshold for developers to switch to the AMD platform and further expand its influence in the AI market.
NVIDIA Blackwell orders are booming
Meanwhile, demand for NVIDIA's Blackwell chip is strong, with a Morgan Stanley analyst stating that the production capacity for the next 12 months has already been sold out. This news has boosted investor sentiment, pushing NVIDIA's stock price close to its historical high. Despite the competitive pressure from AMD, the market generally remains optimistic about NVIDIA's ability to continue expanding its AI processor market share by 2025.
Investment community is optimistic about NVIDIA's prospects, raising target price
Morgan Stanley analysts maintain a positive outlook on NVIDIA, upgrading the stock rating to "overweight" and setting a target price of $150. The analysts believe that with the rapid development of AI technology, NVIDIA is poised to continue leading industry innovation and consolidating its leadership in the high-performance computing field over the next decade.
Nvidia's stock price has recently broken out of the long-term bullish technical pattern of a pennant, triggering optimistic forecasts from Wall Street analysts. Experts believe that Nvidia's stock price could break through $170, and even more aggressive predictions point to a high of $210.
