Nvidia Corp. stands to command “at least 90%” of market share in the AI chip market with Advanced Micro Devices Inc. poised in second place, and to one analyst, that’s reminiscent of AMD and Intel Corp. in servers a decade ago.
In a Monday note on AMD’s
AMD,
stock, Citi Research analyst Christopher Danely said a third-party assessment of AMD’s and Nvidia’s
NVDA,
previous generation AI chips — the MI250 and the A100, respectively — found AMD’s hardware was about 80% as fast as Nvidia’s.
Read: AMD launches new data-center AI chips, software to go up against Nvidia and Intel
“We expect a similar advantage of Nvidia’s H100 vs AMD’s MI300 and we continue to expect Nvidia to have a substantial advantage in AI performance and share versus AMD going forward given superior speed and ecosystem,” Danely said in maintaining his neutral rating and $120 price target on AMD.
Nvidia shares have rallied 186% in 2023 on the promise of cashing in big on artificial intelligence models like Microsoft Corp.
MSFT,
-backed OpenAI’s ChatGPT, with shares of AMD close behind with a 72% gain.
Both Nvidia and AMD have launched new AI chips this year, Nvidia in March and AMD earlier in the month.
“We expect Nvidia to have at least 90% share of AI graphics going forward as the scenario is reminiscent of Intel
INTC,
vs AMD ten years ago when Intel had better performance and ecosystem and over 90% share,” the Citi analyst said.
Read: Nvidia and AMD shares fall on report of new U.S. ban on AI chip exports to China
Both Nvidia and AMD shares were down more than 1% Monday as the PHLX Semiconductor Index
SOX,
rose more than 1%. In comparison, the S&P 500 index
SPX,
was flat and the tech-heavy Nasdaq Composite Index
COMP,
was down 0.3%.
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