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AMD's Earnings Miss Doesn't Matter: Instinct AI Chips Gain Momentum
ByAinvest
Thursday, Aug 14, 2025 4:34 pm ET1min read
AMD's earnings missed expectations, but its Instinct AI accelerator chips are gaining traction with top tech players, including OpenAI. CEO Lisa Su stated that seven of the top 10 model builders and AI companies use Instinct. This growth in adoption supports AMD's long-term prospects, making it a potential buy despite the short-term earnings miss.
Advanced Micro Devices (AMD) recently reported earnings that fell short of expectations, with its adjusted per-share profit missing estimates by one cent. Despite this short-term miss, the company's Instinct AI accelerator chips are gaining significant traction among top tech players, including OpenAI. CEO Lisa Su revealed that seven of the top 10 model builders and AI companies use Instinct, signaling strong long-term prospects for AMD.AMD's new Instinct MI400 chips, set to be released next year, are already being adopted by key players in the tech space. OpenAI, for instance, has expressed enthusiasm about the potential of these chips. This adoption trend is a positive sign for AMD, as it indicates that companies are considering AMD's chips as a viable alternative to Nvidia's offerings.
The growth in adoption of AMD's AI chips supports the company's long-term prospects. AMD's sales growth has been above 20% for multiple quarters, and the trend has been positive over the past year. If AMD can sustain this growth rate, it could capture the attention of more growth investors and drive the stock's performance.
Shares of AMD have rallied by more than 40% this year, and while the stock may seem expensive, trading at over 100 times trailing earnings, its forward earnings multiple of 44 reflects significant growth expected in the near future. For long-term investors, now may be a good time to consider AMD, as its new chips gain market share and drive business growth.
Investors should also consider the broader context of AMD's position in the AI chip market. While AMD is a fraction of the size of Nvidia, its growth and adoption of AI chips could lead to meaningful market share gains. The proof, as it usually is, will be in the numbers.
References:
[1] https://finance.yahoo.com/news/amds-earnings-miss-doesnt-matter-121900372.html
[2] https://www.ainvest.com/news/strategic-synergy-oracle-google-cloud-accelerating-enterprise-agentic-ai-adoption-2508/
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