Roth MKM’s AI & Non-AI Stocks To Be Cautious About: 15 Stocks Bank With $60 Billion Capital Raise Is Watching

13. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders In Q3 2024: 107

Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American chip designer that designs and sells CPUs, GPUs, custom chips, and other products used in the data center industry. It is the only chip designer in the world that serves the needs of both the CPU and GPU industries. Consequently, Advanced Micro Devices, Inc. (NASDAQ:AMD) enjoys a unique position in the AI-driven stock market due to its diverse product portfolio. However, on the flip side, it is a lagging player in both industries. Advanced Micro Devices, Inc. (NASDAQ:AMD) is second place to Intel in the CPU and NVIDIA in the GPU markets. While NVIDIA’s GPU products are the market leaders in performance, and Advanced Micro Devices, Inc. (NASDAQ:AMD) can benefit from the continued weakness faced by Intel in its CPU business. However, Advanced Micro Devices, Inc. (NASDAQ:AMD) might see tailwinds in the AI industry should companies start to prefer affordable AI accelerators.

Advanced Micro Devices, Inc. (NASDAQ:AMD)’s management shared details about its AI business during the Q3 2024 earnings call. Here is what they said:

“Turning to our Data Center AI business, Data Center GPU revenue ramped as MI300X adoption expanded with cloud, OEM and AI customers. Microsoft and Meta expanded their use of MI 300X accelerators to power their internal workloads in the quarter. Microsoft is now using MI 300X broadly for multiple co-pilot services powered by the family of GPT 4 models.

Meta announced they have optimized and broadly deployed MI 300X to power their inferencing infrastructure at scale, including using MI300X exclusively to serve all live traffic for the most demanding Llama 405B frontier model. We are also working closely with Meta to expand their Instinct deployments to other workloads where MI300X offers TCO advantages, including training. MI300X public cloud instance availability expanded in the quarter with Microsoft, Oracle Cloud and multiple AI specialized cloud providers now offering Instinct instances with leadership performance and TCO for many of the most widely used models. Instinct cloud instance adoption is strong with multiple start-ups and industry leaders adopting MI300 instances to power their models and services, including Essential AI, Fireworks AI, Luma AI and Databricks.”