AMD's AI GPU Business Gains Momentum with Oracle Deal and Market Share Growth

AMD stock rises 4% as it claims 45% of Japan's GPU market: Buy or sell?

Advanced Micro Devices (AMD) shares climbed close to 4% on Monday as the chipmaker's gaming GPUs gained market share in Japan, reaching 45%, according to a report from Tom's Hardware. AMD's Japan Marketing Manager Yoshiaki Sato noted that the company is not accustomed to selling such a high volume of graphics cards. Despite the recent gains, AMD shares have lost nearly half of their value over the past 12 months, primarily due to concerns surrounding the company's artificial intelligence (AI) revenue and its ability to compete with Nvidia (NVDA), which has faced supply chain challenges. The tech industry is experiencing volatility as investors express apprehension over stock valuations, with many worrying that stocks are overvalued after two consecutive years of over 25% gains. Morgan Stanley's analysis indicates that the investor sentiment has fluctuated, starting with pessimism in late 2022, skepticism throughout 2023, and a growing optimism for 2025, largely contingent on the adoption of AI technologies. Large-cap growth stocks in the United States saw significant performance in 2024, with the Russell Growth Index climbing 33.4%. This growth was largely attributed to major tech companies, known as the Magnificent Seven, which spurred consistent returns that outperformed value stocks by 9.2% in the fourth quarter, according to a report by LSEG. Bye Nvidia: AMD just launched the best x86 AI APU However, trade policy shifts have led to considerable market volatility, erasing $4 trillion in gains from previous highs. The broader market fell 2.7% on March 10, marking the worst day of the year, and the Nasdaq dropped 4%. Following its peak in February, the market has seen an 8.6% decline as of March 10, prompting hedge funds to reduce their stock exposure at the fastest rate in over two years. AMD's RX 9070 series gaming GPUs have experienced strong sales in Japan amid production constraints. The company aims to increase its gaming GPU market share to 70%. Although Nvidia continues to lead in the high-end gaming GPU segment, its supply constraints have allowed AMD to capture additional market share. Despite the uptick in AMD's stock price, the company is still down approximately 13% in 2025 and has seen a 45% decline over the past year. Currently, AMD is valued at about 22.5 times this year's expected earnings. While some segments of AMD's business are performing well, particularly in GPUs for AI data centers, the company's growth in the AI sector has not met investor expectations. Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

AMD Gears Up For Breakout Year In Artificial Intelligence GPUs Business: Analyst - Advanced Micro Devices (NASDAQ:AMD)

The new Benzinga Rankings show you exactly how stocks stack up -- scoring them across five key factors that matter most to investors. Every day, one stock rises to the top. Which one is leading today? Fresh off a series of investor meetings with Advanced Micro Devices Inc's AMD CEO Lisa Su, JPMorgan analyst Harlan Sur says the company is increasingly confident about delivering over 20% growth in 2025. Sur's expectations stem from a mix of AI acceleration, CPU dominance, and strategic partnerships. These insights stem from the analyst's discussions with AMD leadership at recent investor meetings. See Also: TSMC Proposes Joint Venture With Nvidia, AMD And Broadcom To Operate Intel's Factories: Report AI GPUs: The Next Big Thing Su's AI ambitions are no secret, and AMD is gearing up for a breakout year in its AI GPU business. The company expects over 60% growth in AI GPUs this year alone. That's thanks to a massive ramp in its MI350 accelerator platform. Oracle Corp ORCL just dropped a multi-billion-dollar order for 30,000 MI355X GPUs -- an early sign of demand that AMD believes will only intensify. With Microsoft Corp MSFT, Meta Platforms Inc META, and other cloud giants in line to transition to the MI350 series, AMD's AI roadmap looks stronger than ever. But the real game-changer? The MI400 platform. Coming in 2026, it aims to compete with Nvidia Corp's NVDA Rubin-class compute, targeting massive AI clusters exceeding 100,000 GPUs. AMD isn't just trying to keep up -- it's aiming to redefine AI compute with a more flexible, scalable architecture. Read Also: Advanced Micro Devices Unleashes AI-Focused Chips Powered By 'Zen5' Core Architecture CPUs: More Market Share, More Power AI isn't AMD's only growth engine. Server CPUs remain a core strength, with Su & Co. confident in crossing 50% market share in the long term. AMD closed 2024 with an estimated 37-38% share, up from 32-33% the year before, and expects another 500-600 basis points of gains this year. AMD's direct-sales approach is also eating into Intel's long-standing enterprise dominance. Next-gen AI workloads, including agentic AI (which demands more CPU compute alongside GPUs), should only accelerate this momentum. Meanwhile, AMD's notebook and desktop CPUs continue to gain ground. Market share has been climbing for four consecutive quarters, and a fresh partnership with Dell Technologies Inc DELL to integrate Ryzen AI PRO CPUs into commercial PCs could unlock a new wave of growth. With a diversified compute portfolio spanning AI GPUs, server CPUs, gaming, and embedded markets, AMD is positioning itself for sustained growth in 2025 and beyond. Read Next: Elon Musk Says Tesla Will Double US Production in 2 Years After Trump Backs EV Giant Amid Stock Slump Image: Shutterstock AMDAdvanced Micro Devices Inc$98.852.16%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum11.09Growth82.33Quality92.76Value14.83Price TrendShortMediumLongOverviewDELLDell Technologies Inc$94.022.68%METAMeta Platforms Inc$621.052.53%MSFTMicrosoft Corp$382.850.63%NVDANVIDIA Corp$113.224.11%ORCLOracle Corp$147.982.64%Market News and Data brought to you by Benzinga APIs

JP Morgan Believes AMD's AI GPU Business Would Grow By 60 Percent This Year, Highlights Oracle's Initial Order Of 30,000 MI355X GPUs

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. A few months back, Wall Street analysts were generally bearish on AMD's AI GPU business, with Wolfe Research noting in December 2024 that "AMD won't be in a position to guide AI for CY25." The prevailing sentiment was perfectly captured by the president of comma.ai, George Hotz, when he declared in January 2025 that "nobody at comma wants to deal with AMD." However, things have finally started to improve for AMD, as pointed out by JP Morgan analyst Harlan Sur in his latest note. To wit, JP Morgan recently held investor meetings with AMD's CEO, Lisa Su, and came away with the "view that the [AMD] team is incrementally more confident on driving strong double-digits % growth (>20% in our view) and stronger earnings growth in CY25." Sur identified four major catalysts for AMD: On AI GPUs, Sur notes that AMD is building momentum ahead of "a strong 2H ramp of its next-gen MI350 accelerator platform." As an illustration of this momentum, Sur points to Oracle's recent announcement relating to a multi-billion dollar order for the MI355 GPU, "with an initial tranche of 30K MI355X next-gen GPUs, to build a cluster targeted at both training and inferencing workloads)." What's more, the JP Morgan analyst believes that AMD is now working hard to transition its existing major customers - Microsoft, Meta, Oracle - to the MI350 platform by mid-year, "ahead of its rack-scale (>100K GPUs per cluster) next gen MI400 platform in CY26." Finally, Harlan Sur notes: "Overall, the key message is that the team's strong and diversified data center/enterprise/client compute portfolio will drive strong growth in CY25 - combination of share gains, improving demand/cyclical trends, and growing momentum for its next-gen AI compute solutions." Meanwhile, in a related development, Reuters is now reporting that TSMC is urging NVIDIA, AMD, and Broadcom to buy a stake in a possible joint venture between Intel and TSMC, whereby the latter would principally operate the former's foundry division.

Has AMD's "Nvidia Moment" Finally Arrived?

AMD is winning over impressive clientele in its GPU business. If you've been following the artificial intelligence (AI) narrative over the last couple of years, then chances are you're familiar with the term "large language model" (LLM). LLMs such as ChatGPT, Gemini, and Claude each boast a multitude of capabilities and selling points, but one of the overlapping features of these models is that they can answer questions on just about any topic almost instantly. In just a couple of years, the rise of LLMs has turned the process of spending minutes or even hours on the internet to find the answer to a question into an antiquated function. While LLMs can be fun to use, have you ever wondered how these models are able to read your question, scrape the internet for information, and process this data so quickly? Perhaps the biggest supporting pillar of an LLM's foundation is a piece of hardware called a graphics processing unit (GPU). GPUs are housed inside of data centers and stored together in large clusters on server racks. In turn, these chipsets are able to process enormous volumes of data to generate detailed responses to inputs fed through the LLM. Right now, Nvidia is the leader of the GPU landscape -- having acquired an estimated 90% market share. Nvidia built its substantial lead in the GPU realm thanks to its first mover-advantage, meaning that the company had very little in the way of legitimate competition since AI emerged as the hot new ticket in the technology sector. Unsurprisingly, eager investors have fueled Nvidia's share price to new highs over the last couple of years. In fact, as of this writing, Nvidia is the second most valuable company in the world as measured by market cap. Nevertheless, Advanced Micro Devices (AMD 3.70%) recently started demonstrating its own ability to penetrate the data center GPU market. Below, I'm going to detail why I think AMD's "Nvidia moment" may have finally arrived and assess why the stock looks like a screaming buy right now. AMD gets great news from Oracle Nvidia's first-mover advantage in the GPU market also came with a lucrative benefit in the form of pricing power. A combination of soaring demand for chipware and lack of competition allowed Nvidia to sell its GPUs at astronomical prices -- making it a highly profitable product for the company. There are only so many companies out there that can afford to spend billions of dollars on a consistent basis to buy Nvidia's hardware, and so it shouldn't come as a surprise that the company boasts the likes of "Magnificent Seven" members Microsoft, Meta Platforms, Tesla, and Alphabet as some of its largest customers. Debating whether Nvidia or AMD has the superior chipware is more of a subjective argument. With that said, the introduction of AMD's MI300X accelerators comes with more than just an alternative GPU on the market. AMD can compete with Nvidia on price, and recent trends indicate that some big tech companies may be looking for ways to build their AI infrastructure in a more cost-efficient manner. For example, AMD's MI300X accelerator chips have garnered both Microsoft and Meta as customers in recent quarters. In addition to Microsoft and Meta, Oracle recently shared with investors that it "signed a multi-billion dollar contract with AMD to build a cluster of 30,000 of their latest MI355X GPUs." While AMD's foray into the GPU realm is still nascent, I think the company has done an impressive job acquiring leading AI enterprises as customers -- especially ones that have been working closely with Nvidia over the last two years. Given AMD is scheduled to release next-generation chipsets, I find the company's early wins with its current architecture as an encouraging sign of what could be in store over the next couple of years. AMD's valuation is a bargain Unlike its counterpart, AMD's share price has not received anywhere near the same level of enthusiasm compared to Nvidia. But with shares down 47% over the last year, AMD stock has become too cheap to ignore. As of this writing, AMD is trading at a forward price-to-earnings (P/E) multiple of 22 -- its lowest level in well over a year. I think investors aren't giving AMD's GPU business enough credit and view the company as a laggard compared to Nvidia. But in my eyes, AMD need not outperform Nvidia's data center business in order to be seen as a worthy investment. Rather, I think that AMD's current trajectory and impressive customer wins could lead to a prolonged period of sustained accelerated growth -- underscored by the company's relentless pursuit of incremental market share in the GPU realm. In other words, AMD may not become the No. 1 player in the chip space. But if the company can demonstrate its ability to continue winning large contracts and grow at a pace commensurate to or even faster than Nvidia (already a mature player in the GPU industry) then I could see growth investors flocking to AMD stock as an alternative to Nvidia. Despite an underwhelming performance over the last year, I think AMD stock could be on its way to witnessing a similar path to that of Nvidia following the initial jolt from the AI boom.