AMD's Market Cap Approaches 4 Trillion Yuan, Benefiting from CPU and GPU Price Increases, 5x Growth in Over 5 Years
Following Intel's stock surge and return to a market cap above $400 billion, AMD is also experiencing strong growth, with even more compelling reasons. AMD's stock rose 14% last Friday and 71% in April alone, potentially exceeding the record 78% monthly increase set in January 2021 this month.
AMD's market cap has surpassed $500 billion for the first time, currently reaching over $567 billion, almost 4 trillion yuan. It's worth noting that AMD first broke $100 billion in August 2020.
This represents a roughly 5-fold increase in under 5 years, and with several months still remaining until August, it's likely to easily surpass $600 billion.
Optimistic investors are already predicting AMD's market cap will reach $1 trillion, and Wall Street analysts are expected to release further bullish reports soon.
The recent surge is linked to the changing role of CPUs in the AI era. As previously analyzed regarding Intel, CPUs were once considered failures in the AI era, with everyone vying for GPUs, leading to NVIDIA's $5 trillion market cap.
However, since this year, the value of CPUs has been reassessed. They are no longer mere bystanders in AI computing power but have become a critical bottleneck. The CPU-to-GPU ratio is increasing from 1:4 or even 1:8 to 1:2, significantly increasing demand. AMD and Intel are currently struggling to keep up with supply, and server CPUs are also experiencing price increases.
This is the logic behind the recent stock surge for CPU companies, whether it's accurate or not, the current sentiment is undeniable.
For AMD, they have a unique advantage: possessing two core businesses – high-performance CPUs and GPUs. When NVIDIA's GPUs were being hyped, AMD was seen as the second-largest GPU supplier, and its stock also soared.
Now, with CPUs experiencing a surge, AMD's position is even stronger than being the perennial second in the GPU market. This is because the EPYC processor's competitiveness in the market may be higher than Intel's Xeon, offering more cores, supporting SMT hyper-threading, and providing better value. It is currently experiencing shortages and price increases.
AMD will release its Q1 earnings report on May 5th, which should provide more details. This year, they will also be the first to launch the Zen6 architecture EPYC processor Venice, built on a 2nm process, offering even greater performance.