Analyst reacts to AMD-MSFT collaboration
So far, Microsoft does not have a special purpose processor that can be used to train large language models.
With Athena, though, it intends to defeat that shortcoming and compete more fiercely against its competitors, including Amazon and Alphabet.
On CNBC’s “Closing Bell”, Bernstein analyst Stacy Rasgon agreed that the collaboration supports the narrative that AMD is committed to expanding its footprint in artificial intelligence but said:
Commentary around [Microsoft] offering financial support, to me, sounds like more of a semi-custom model rather than direct silicon sale, which is good, but maybe it’s not as good as selling a GPU.
AMD shares are now up roughly 40% for the year.
Should you buy AMD shares on this news?
Earlier this week, Advanced Micro Devices issued disappointing guidance for its current financial quarter as Invezz reported HERE – and Rasgon does not see the Microsoft news as reason enough to rethink the estimates either.
From a fundamental basis, my guess is significant revenue is going to be a while [considering] the way these kinds of things work. So, I wouldn’t hold my breath. But if it helps the story, it helps the story.
His $80 price target on AMD shares translates to about a 10% downside from here.
Remember that the chipmaker is already a supplier to Microsoft. Both AMD and MSFT are yet to officially comment on the Bloomberg report.
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