TLDR
- AMD launched its MI350 line of AI chips to compete directly with Nvidia’s Blackwell processors, offering up to 4x AI compute performance
- The company unveiled AMD Developer Cloud, giving developers cloud access to AMD’s AI processors without purchasing hardware
- AMD’s Data Center segment generated $3.7 billion in Q1, up 57% year-over-year, driven by demand for EPYC CPUs and Instinct GPUs
- Client segment revenue surged 68% to $2.3 billion in Q1, powered by new Zen 5 Ryzen processors and AI-enabled laptop adoption
- AMD stock trades at 31x current year earnings but analysts project 44% EPS growth by 2026, suggesting potential undervaluation
AMD unveiled its MI350 line of AI processors at its Advancing AI event in San Jose on Thursday. The chips target Nvidia’s Blackwell processors in the competitive AI hardware market.
The MI350 line includes the MI350X and MI355X models. AMD claims these processors deliver up to four times the AI compute performance of previous generation chips.
Introducing the AMD Instinct MI350 Series GPUs, featuring the Instinct MI350X and Instinct MI355X, that set a new standard for GenAI and high-performance computing. pic.twitter.com/96srcutXdk
— AMD (@AMD) June 12, 2025
Each MI350 chip contains 288GB of HBM3E memory. This exceeds the 192GB found in individual Nvidia Blackwell GPUs, though Nvidia pairs two chips in its GB200 superchip for 384GB total.
AMD offers both individual chips and platform configurations. The MI350X and MI355X platforms combine eight GPUs each, providing up to 2.3TB of memory.
The company designed systems with up to 64 GPUs for air cooling. Larger 128-GPU systems require liquid cooling systems with coolant pipes and radiators.
AMD also revealed details about its upcoming MI400 line scheduled for 2026. These chips will feature up to 432GB of HBM4 memory and speeds reaching 19.6TB per second.
Cloud Service Expansion
The company launched AMD Developer Cloud alongside the chip announcement. This service provides developers with cloud access to MI300 and MI350 GPUs without hardware purchases.
The cloud platform allows quick access to high-powered chips for AI training and inference tasks. Nvidia launched a competing service called DGX Cloud Lepton last month.
AMD’s move into cloud services reflects the growing demand for AI computing resources. Developers can now test and deploy AI applications using AMD hardware through the cloud platform.
Financial Performance Shows Mixed Results
AMD’s stock performance has lagged over the past year. The stock fell roughly 24% in the past 12 months while Nvidia gained over 19%.
Year-to-date performance shows AMD down 0.2% compared to Nvidia’s 7% gain. Both companies faced challenges from export controls on AI chips to China.
AMD expects an $800 million impact from the China export restrictions. Nvidia faced a larger $4.5 billion write-down and expects to miss $8 billion in sales.
The Data Center segment generated $3.7 billion in Q1 revenue. This represents a 57% year-over-year increase driven by EPYC CPU and Instinct GPU demand.
Client segment revenue reached $2.3 billion in Q1, up 68% year-over-year. The growth came from strong adoption of Zen 5 Ryzen processors across laptops and desktops.
AMD’s Ryzen AI Max chips power over 50 AI-enabled laptop models expected this year. The processors target Microsoft’s Copilot+ PC market and other AI-driven devices.
Valuation and Growth Prospects
AMD currently trades at 31 times this year’s consensus earnings of approximately $4. Analysts project 44% EPS growth by 2026, reaching an estimated $5.71 per share.
The forward price-to-earnings ratio would drop to 22 times based on 2026 projections. Wall Street maintains a Moderate Buy rating with 22 Buy and 10 Hold recommendations.
AMD’s gross margin improved to 54% in Q1 as the higher-margin data center segment scales. The average analyst price target of $127.93 suggests modest upside potential.
The company made strategic acquisitions including Untether AI and Brium to expand AI capabilities. CEO Lisa Su projects the AI accelerator market could reach $500 billion by 2028.
AMD’s MI350 systems with 64 GPUs launched Thursday with air cooling capabilities, while 128-GPU configurations use liquid cooling technology.
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