AMD will not be able to compete with Nvidia and earn as much money from AI this year as expected

Nvidia is considered to be the main beneficiary of the boom in artificial intelligence systems, since it is this company that supplies the market with the bulk of computing accelerators for the corresponding infrastructure. Wolfe Research analysts believe that rival AMD will not be able to earn as much from AI this year as previously expected.

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Experts no longer recommend their clients to buy AMD shares and abandon their forecast for the exchange rate at $210 per share. In their opinion, the company will not be able to earn as much money from selling GPUs for data centers as previously expected. In the first quarter of this year, according to the source, AMD will earn only $6.6 billion instead of the $7.04 billion previously forecast, and specific earnings per share will be $0.8 instead of $0.93. In principle, others on Wall Street expect AMD to generate the same revenue, but their earnings per share forecast is slightly higher ($0.95).

In general, this year AMD will be able to earn only $29.9 billion, according to representatives of Wolfe Research, while the consensus mentions the amount of $32.3 billion, and earlier forecasts of the analysts of the said company themselves called $33.6 billion as a benchmark for revenue. In their opinion, AMD’s specific earnings per share for the current year will not rise above $4.19, while the consensus mentions $5.02 per share.

Complicating the situation for AMD is that after a strong fourth quarter, the PC market will see weak demand and the gaming segment will also offer little progress. But in the second half of this year, as Wolfe Research analysts are convinced, the Instinct MI350 accelerator will come to AMD’s aid. It will provide a significant increase in performance compared to the Instinct MI325 and will increase demand for specialized AMD products. Dell’s readiness to begin using AMD PC processors in the enterprise sector will certainly allow the latter to strengthen its market position in the consumer segment. Analysts at Goldman Sachs already downgraded AMD shares this month, citing modest revenue growth in the data center segment and high competition in this area.