"We don't have to rely solely on defeating Nvidia to succeed," AMD CEO Su Zifeng said to the media in March last year when discussing the significant opportunities brought by AI.
However, a year has passed and Wall Street is still paying the bill for NVIDIA's challengers with unprecedented enthusiasm. On February 29th Eastern Time, AMD's stock price surged 9.1% in a single day, and the company's market value exceeded $300 billion for the first time. As of press release, it has reached $311.1 billion. The company's closing stock price on Thursday was $192.53 per share, which has more than doubled from the low point in October last year.
Earlier on the same day, Citibank released a report listing AMD, Braodcom, and Nvidia as its preferred AI chip semiconductor stocks. The institution stated that it is extremely optimistic about semiconductors, especially during the current period of explosive demand for AI computing power.
Nvidia's latest financial report released last week shattered the doubts of analysts about its "stock price overheating", and its market value approaching $2 trillion has once again ignited market sentiment.
The three major US stock indexes, the Dow Jones, S&P 500, and Nasdaq, are currently at record highs. Including February, the S&P 500 index has been rising for four consecutive months, with a cumulative increase of 5.2% in February. AI is a shot in the arm for the bull market in the US stock market. In January and February of this year, 38% of companies in the S&P 500 index mentioned AI during quarterly earnings conference calls.
And regarding the question of who can challenge Nvidia from the outside world, Nvidia has also provided its own standard answer. Last Wednesday, Nvidia submitted a document to the US Securities and Exchange Commission (SEC) listing a list of competitors. This includes Intel, AMD, Broadcom, and Qualcomm, as well as several large cloud computing companies such as Amazon and Microsoft. It is worth noting that Huawei has also been officially listed as its main competitor for the first time.
As a long-time competitor of Nvidia in the era of computer GPUs, AMD is also seen by various companies as an "additional option for Nvidia" in the era of AI computing power. AMD released the MI300 series of AI chips in June last year, which were benchmarked against the Nvidia H100. Microsoft, Amazon, Tesla, Oracle, and more companies have been exposed as seeking to purchase the product.
At the company's financial report conference call at the end of January this year, AMD executives rated the expected sales of their MI300 series GPUs at $3.5 billion, an increase of $1.5 billion compared to before. However, such expectations still cannot satisfy Wall Street's appetite. Multiple institutional analysts expected the market size of AMD products to be between $4 billion and $8 billion, leading to a single day drop of nearly 6% in the company's stock price after the financial report was released.
At present, there are still doubts from the outside world about whether AMD is overvalued, and Nvidia currently monopolizes nearly 90% of the AI server market. AMD's current P/E ratio (stock price divided by earnings per share, i.e. total market value divided by annual net profit) is as high as 364 times, far exceeding Nvidia's 66.5 times.
Nevertheless, AMD remains one of the semiconductor companies benefiting from the AI dividend. As of the end of last year, AMD's stock price had risen by over 120%, nearly 90 percentage points higher than the Philadelphia Semiconductor Index (NASDAQ Semiconductor Industry Benchmark Index, one of the main indicators of global semiconductor industry prosperity).