AMD Stock: Get Ready For Something HUGE‼️

Summary

The video delves into the latest developments in the AI space, highlighting a Chinese company, Deep Seek, that has launched a cost-effective AI model, challenging the American giants. The discussion covers AMD's role in the AI industry, particularly in AI inference and training, with a focus on their collaboration with Deep Seek and their upcoming advancements. The video also touches on stock performance analysis, growth projections, and the competition between AMD and Nvidia, with a look at how AMD aims to compete and grow in AI hardware despite challenges in software.

Takeaways

• 😀 AMD's stock saw significant price drops in 2022 but has started to show signs of recovery in the past two weeks.
• 😀 DeepSeek, a Chinese AI company, released its own AI model that reportedly performs similarly to OpenAI's older models but at a much lower cost, raising questions about its accuracy and the cost of American models.
• 😀 The cost of training DeepSeek's AI model was only $5.57 million, excluding prior research and experimentation, which adds to concerns about its transparency.
• 😀 There are speculations that DeepSeek may have access to more powerful Nvidia H100 chips than expected, despite export restrictions.
• 😀 AMD is working to position its GPUs as an alternative to Nvidia’s by focusing on efficiency and cost-effectiveness, particularly in AI inference tasks.
• 😀 AMD’s collaboration with DeepSeek is designed to integrate DeepSeek’s AI models with AMD's Instinct MI 300X GPUs for better performance in AI tasks.
• 😀 AMD’s strategy relies heavily on open-source software and its Roam platform to compete with Nvidia's CUDA, which currently holds a significant advantage.
• 😀 AMD aims to become a strong player not only in AI inference but also in AI training, aiming for a more balanced portfolio by 2025.
• 😀 AMD’s Instinct MI 300X and MI 400 series chips are expected to significantly compete with Nvidia’s GPUs by 2025 and 2026, respectively.
• 😀 AMD expects rapid growth in net income, earnings per share (EPS), and free cash flow in the next few fiscal years, especially as they expand their AI-related offerings.

Q & A

What is Deep Seek and why is its AI model causing a stir in the industry?

Deep Seek is a Chinese AI company that recently introduced an AI model, claiming performance on par with OpenAI's GPT-3. The significant point of interest is that Deep Seek's model costs far less to develop than its American counterparts, raising questions about the cost-efficiency of AI model training.

How much did Deep Seek claim to spend on training their AI model?

Deep Seek reported spending only $5.57 million on the training of their AI model, a stark contrast to the hundreds of millions or even billions spent by American companies like OpenAI.

What role does AMD play in the AI space, especially with regards to Deep Seek?

AMD has integrated Deep Seek’s V3 model into its Instinct MI 300X GPUs, showcasing their commitment to AI inference. This highlights AMD's strategy of offering more cost-effective alternatives to Nvidia while also pushing for improvements in both hardware and software for AI applications.

What’s the difference in approach between AMD and Nvidia in the AI market?

AMD focuses on an open-source approach with its Roam software and Instinct GPUs, aiming to compete with Nvidia’s dominant CUDA software. While Nvidia currently leads in AI hardware and software, AMD believes that an open ecosystem could enable them to capture more market share in the future.

What is the significance of AMD’s announcement about their collaboration with Deep Seek?

AMD’s announcement of their collaboration with Deep Seek emphasizes the power and performance of AMD’s GPUs for AI tasks, especially AI inference. It reflects AMD’s increasing role in the AI sector as they try to gain ground against Nvidia in both hardware and software for AI applications.

What does 'AI inference' mean, and why is it important for AMD?

AI inference refers to the phase where an AI model makes predictions or decisions based on input data, as opposed to training the model. It’s important for AMD because the company’s GPUs, like the MI 300X, are optimized for inference tasks, which are crucial for real-time AI applications.

How does AMD plan to challenge Nvidia's dominance in AI model training and inference?

AMD plans to challenge Nvidia by focusing on offering high-performance, cost-effective solutions, especially in AI inference. They are also working to improve their software offerings and develop a competitive edge in AI training, with future products like the MI 400 series expected to directly compete with Nvidia’s solutions.

What is the current expectation for AMD’s stock performance and financial growth?

Analysts expect AMD’s stock to grow significantly, with a projected 40% upside. In terms of financial growth, AMD’s net income is forecast to increase sixfold by the end of fiscal 2026, with free cash flow expected to rise substantially as well.

How does AMD’s stock chart compare to previous market trends?

AMD's stock has exhibited a pattern of sharp declines followed by significant rebounds. For example, after a 67% drop in 2022, the stock saw a strong recovery. Similarly, after a 50% drop in early 2024, the stock is showing signs of recovery, prompting analysts to predict another upward trend.

What is the expected future growth of AMD’s AI-related revenue?

AMD's AI revenue is expected to grow significantly, with analysts forecasting a rapid increase in both AI inference and training adoption. By 2025, AMD anticipates a balanced portfolio between AI inference and training, as products like the MI 325 and MI 400 series come to market.