Spending on AI infrastructure keeps growing, and Advanced Micro Devices (AMD) keeps emerging in the middle of it. As the latest example, there is news of a 20-year data center deal of Anthropic with Riot Platforms (RIOT) that Wedbush believes will be good for AMD and the AI hardware sector. Riot will give "a leading frontier AI company" 191 megawatts (MW) of capacity, said to be Anthropic.
The tie-up with AMD looks rather interesting, as RIOT currently operates 25 MW of capacity for AMD, has another 25 MW under construction and even more potential AMD capacity that could reach 200 MW. On top of that, AMD has announced a new strategic partnership with Anthropic that involves deployments of up to 2 gigawatts of MI450 Series GPUs in Helios racks. A $20 Billion Reason Why Intel Stock Is in Focus Dear Intel Stock Fans, Mark Your Calendars for August 12 Ahead of Nebius Earnings, Here's What Barchart Data Says Comes Next for NBIS Stock Get exclusive insights with the FREE Barchart Brief newsletter.
Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Together, it all serves as another indicator that AMD is shifting from product announcements to AI infrastructure. Santa Clara, California-based AMD designs high-performance CPUs, GPUs, adaptive computing products, and AI accelerators.
It is one of the largest chipmakers with a market cap of $774.32 billion. AMD stock has increased 224.8% since the 52-week low of $149.22. At the same time, its price remains 20.5% lower than the 52-week high of $584.73.
The increase in the share price stems from growing investor confidence that AMD will become a serious alternative to Nvidia (NVDA) in the expanding AI accelerator market. However, the valuation is quite high. AMD is trading at 72.91 times forward price-to-earnings and 22.13 times price-to-sales.
There is not much room left for any execution mistakes as the investors seem to expect considerable growth from Instinct GPUs, EPYC server CPUs, and Helios solutions. Nevertheless, high growth rate makes the stock valuation more acceptable. The question is whether AMD will manage to grow its earnings and revenues enough to justify its premium.
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