Advanced Micro Devices, Inc. (NASDAQ: AMD) has recently unveiled its AI chip, the Instinct MI300X, propelling the company into direct competition with industry leader NVIDIA Corp (NASDAQ: NVDA).
The chip is engineered specifically for AI-centric servers and the Instinct MI300X has already captured the interest and support of tech giants Microsoft (NASDAQ: MSFT) and Meta (NASDAQ: META).
Analysts predict that AMD could achieve around 10% of the AI chip market, a significant feat given Nvidia's stronghold in the industry.
In addition, they have set a bold goal of achieving $2 billion in AI GPU sales by 2024, demonstrating their confidence in the Instinct MI300X and its potential impact on the market.
AMD's announcement has sparked a positive market response, with its shares surging by almost 10%. This significant move reflects investor confidence in the new product and its potential in the market.
On the other hand, Nvidia's shares experienced a more modest rise of 2.4%. Previously their stock has been struggling to surpass its all-time high of around $500. This psychological resistance level has hindered the stock's growth since August.
Nvidia has achieved a remarkable 215% increase in stock value over the past year. As the stock prepares for future growth, it is currently in a consolidation phase.
This is evident as the stock has been fluctuating between the support level of $400 and the resistance level of $500. Any potential decline in stock value could potentially trigger a rebound at the $400 mark.
The company has long been the dominant force in AI chip development, but the arrival of AMD's Instinct MI300X shakes up the landscape.
This new competition has the potential to impact both Nvidia's stock and the entire AI chip market. AMD will be launching the Instinct MI300X in substantial numbers starting next year.
After the closing bell on Thursday, December 7, the stock closed at $465.96, trading up by 2.40%.