AMD Stock in 2024: Reasons to Buy

In 2023, Advanced Micro Devices (AMD) experienced significant growth due to the rise of generative artificial intelligence (AI). The company’s stock more than doubled in value, and it is expected to continue its growth trajectory in 2024. There are several reasons why investors should consider buying AMD stock in the coming year.

1. New AI Chips for Supercharged Growth:

AMD’s CEO, Lisa Su, has stated that the data center AI chip industry could grow from its current value of $45 billion to an astonishing $400 billion by 2027. AMD’s primary competitor, Nvidia, currently dominates this market with a 80% market share. However, AMD is positioning itself to capture a portion of this rapidly expanding market with its new MI300 family of chips. These chips are designed to outperform Nvidia’s flagship h100 and a100 chips in training and inference, the process of running generative AI models.

AMD has already secured major clients such as Meta Platforms, OpenAI, and Microsoft, which demonstrates confidence in the MI300’s capabilities. As these chips begin to contribute significantly to AMD’s sales in 2024, investors can expect to see a substantial increase in the company’s revenue.

2. Recovery of Legacy Businesses:

While AMD’s AI-focused business is garnering significant attention, it is essential not to overlook the company’s legacy operations related to consumer and enterprise processors and graphics. These businesses are currently in recovery mode, and their improvement will contribute to AMD’s overall growth in 2024.

3. Addressing the AI Chip Market Shortage:

The AI chip market is currently facing widespread shortages and bottlenecks. AMD’s MI300 chips can help address this issue by providing a more efficient solution for consumers. As the demand for AI chips continues to grow, AMD’s MI300 chips will play a crucial role in meeting this demand, further driving the company’s growth in 2024.

In conclusion, AMD’s focus on AI chips, the recovery of its legacy businesses, and its ability to address the AI chip market shortage make it a strong investment choice for 2024. Investors should consider adding AMD stock to their portfolios as the company continues to capitalize on the growing demand for AI technology.