Analyst on Advanced Micro Devices (AMD)-OpenAI Deal: ‘We Are Not As Worried About Circularity’

Core Viewpoint - Advanced Micro Devices, Inc. (NASDAQ:AMD) is gaining attention as a trending stock due to rising demand for computing power, particularly in the AI sector [1][2] Group 1: Market Position and Demand - The semiconductor industry is experiencing increased demand driven by AI applications, with AMD positioned to benefit from this trend [1][2] - OpenAI's rapid user growth, reaching 800 million weekly active users and potentially hitting 1 billion by year-end, is significantly increasing the demand for computing resources [2] - AMD is expected to enhance its market share in AI-related GPUs by 2027, potentially matching the market leader NVIDIA [3] Group 2: Strategic Partnerships - OpenAI has established partnerships with leading semiconductor companies, including AMD and Broadcom, to support its infrastructure needs [2] - The total deals signed by OpenAI with AMD and NVIDIA are projected to represent less than 5-10% of the overall deployment in the AI industry, indicating a broad ecosystem development [2] Group 3: Future Outlook - Analysts express optimism about AMD's revenue and profit growth potential as hyperscale customers may increasingly opt for dual-sourcing high-end chips [3] - The diversification of ecosystems in the AI industry, with participation from various chip makers, suggests a robust future for companies like AMD [2]