The bull case: Promising progress in AI

AMD started 2023 on the back foot, with its biggest competitor Nvidia getting a head start in AI. Nvidia's dominating market share in GPUs has helped it attain a 90% share in AI chips and led to lucrative partnerships with some of the industry's biggest companies, like ChatGPT's OpenAI.

As a result, AMD has spent the first half of 2023 playing catch-up and putting all of its resources toward developing its AI chips. In June, the company unveiled its most powerful GPU to date, the MI300X. Along with its other products, AMD's AI expansion has caught the eye of tech giants across the industry.

Moreover, many tech companies and Nvidia customers are rooting for AMD to succeed because increased competition should reduce the cost of chips. This thinking has motivated Microsoft to join in AMD's chip expansion.
The Windows company is reportedly supporting AMD's growing venture in the sector with financial and engineering resources. Microsoft's position as the leading investor in OpenAI has granted it exclusive licenses on multiple AI models, which could make its guidance invaluable for AMD.