Yesterday, we discussed an event that left investors feeling underwhelmed, largely due to the elevated expectations leading up to it.

Tesla’s (TSLA) “We, Robot” event wasn’t the only one that left investors feeling disappointed recently.

Just last week, Advanced Micro Devices (AMD) held an AI-focused event that failed to generate the kind of excitement many had hoped for.

Many AMD investors have been expecting the company to make a more aggressive push into the AI space, especially given the dominance of Nvidia (NVDA) in the market.

AMD has been viewed as one of the few potential challengers to Nvidia’s leadership in AI chips, so naturally, anticipation was high going into this event. However, the lack of any significant new updates to its AI strategy left many disappointed.

Analysts who followed the event closely noted that much of what was shared felt like a recap of already-known topics, rather than groundbreaking news that could have made some noise.

At the event, AMD introduced some new products, including its Turin EPYC data center CPUs and the Instinct MI325x AI accelerator.

The company also revealed its Ryzen AI PRO 300 Series, which will power Microsoft Copilot-enabled laptops designed for enterprise use.

These are notable developments, but they didn’t seem to move the needle in terms of sparking enthusiasm among investors.

One of the biggest letdowns was the absence of any upgrades to AMD’s AI revenue forecast.

Going into the event, investors were hoping that AMD would revise its outlook upward, especially given the rapid growth in the AI market.

But there was no such news. Instead, AMD reiterated its previously announced $4.5 billion AI revenue forecast through 2025, leaving investors wanting more.

AMD’s lack of a more confident outlook contributed to the stock’s 4% decline following the event. Analysts are now looking to AMD’s upcoming Q3 earnings release for more clarity on the company’s AI growth prospects.

Despite this reaction, AMD did provide a glimpse into its roadmap for AI chip development. The company outlined a two-year plan, with its MI325x accelerator launching in 2024, followed by the MI350 in 2025, and the MI400 in 2026.

CEO Dr. Lisa Su also pointed to the expected growth in the data center AI accelerator market, projecting it to expand from $45 billion in 2023 to $500 billion by 2028.

While this paints a positive long-term picture, investors remain eager to see how AMD plans to capitalize on this opportunity in the near term.

AMD’s AI accelerator, the MI325x, was praised as being superior to Nvidia’s H200 HGX in several areas, but the true test will come when Nvidia’s next-generation Blackwell GPUs hit the market.

Nvidia has been shortening its product release cycles to keep up with the evolving AI space, and AMD has pledged to deliver performance leadership on a similar timeline.

The competition between these two tech giants remains intense, and it’s still unclear how much ground AMD can realistically gain on Nvidia.

Some remained optimistic about AMD’s potential in the AI space, highlighting AMD’s strength in providing both GPUs and CPUs for AI applications, with major tech companies like Oracle (ORCL), Microsoft (MSFT), and Meta (META) already deploying AMD’s Instinct and EPYC products.

AMD’s efforts to build out its software ecosystem, particularly its ROCm platform, also received praise.

This open software stack is optimized for AI and high-performance computing applications, which could be a key differentiator for AMD as it seeks to attract AI developers.

Yet, despite these positives, many others were less enthusiastic. Most of the analysts described the event as “largely uneventful,” noting that AMD’s management merely reiterated already well-known product roadmaps.

While the company has a promising roadmap and is making strides with its AI products, the high expectations going into the event were not fully met.

Investors are now looking ahead to the company’s next earnings release for more clarity on its AI strategy and near-term growth potential.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Strategist &
Director of Research
at Valens Research

This portfolio analysis highlights the same insights we share with our FA Alpha Members. To find out more, visit our website.