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Key Facts on AMD’s Recent Developments
Advanced Micro Devices (AMD) announced a significant deal with OpenAI on October 2023, to provide 6 gigawatts of computing power. This partnership marks a pivotal moment as it demonstrates the adoption of AMD’s hardware by a leading generative AI company, amid increasing competition from Nvidia and Broadcom, both of which have secured larger contracts providing 10 gigawatts each.
AMD is set to report its Q3 earnings on November 4, where it may reveal a backlog of orders generated from the OpenAI agreement. In contrast, AMD’s previous quarter saw data center revenue increase by only 14% year-over-year yet fall by 12% sequentially, while Nvidia experienced a 56% annual rise. AMD’s current valuation stands at 41 times projected 2026 earnings, raising concerns over its ability to convert recent partnerships into substantial sales.
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