Time to buy Nvidia? Is this as cheap as it gets?
9 August 2024
Welcome to AI Collision 💥,
In today’s collision between AI and our world:
Are AMDs earnings a sign of what’s to come for Nvidia?
AI in your eyeballs
Olympic pasta
If that’s enough to get the wacky waving inflatable tube guy waving, read on…
AI Collision 💥
Last week AMD released its quarterly earnings.
After a spate of AI- and tech-related companies beat earnings, but still managed to disappoint the market, there wasn’t high hopes for AMD.
The reason that AMD’s earnings are important though is because the company is somewhat of the canary in the coal mine for its (now) bigger sibling, Nvidia.
You see as the “next best thing” to Nvidia, certainly in terms of AI technology, if AMD was going to come out of the earnings gate firing, then it sets the scene for a ridiculous set of numbers for Nvidia on 28 August.
Well, yes, AMD did fire out of the gates. Let’s take a look at what it looked like…
AMD’s results highlighted “strategic growth” in AI and data centre markets. The company reported revenues of $5.8 billion, a 7% rise from the previous quarter and a 9% jump year-over-year.
But the nice kicker was gross margins improving to 49% from 46% year on year, driven by record revenue from its data centre segment, all tied to AI advancements in its tech arsenal.
The actual number for AMD’s data centre segment was a record $28 billion, a whopping 115% increase year-over-year.
The company’s strategic investments in AI are putting the company on a more level playing field with Nvidia in tech terms. It will take some overhaul to knock Nvidia off the market cap game, but it’s not an unrealistic possibility over the rest of the 2020s.
AMD isn’t stupid and its top-notch leadership starting with Lisa Su at the top of the tree continues to build its AI arsenal both technology development and through acquisitions, such as the planned acquisition of Silo AI.
But the encouraging aspect of AMD and what could be the precursor to Nvidia blowing the roof off in a few weeks is the growth in data centre and AI infrastructure.
This is down to advances in tech, and I’ll be honest, it’s a lot…
As the company explained,
AMD expanded its leadership end-to-end AI solutions portfolio with new CPUs, GPUs, NPUs and software offerings:
At Computex 2024, AMD unveiled an expanded AMD Instinct accelerator roadmap, bringing an annual cadence of leadership AI performance and memory capabilities. The roadmap includes the new AMD Instinct MI325X accelerator, planned to be available in Q4 2024, with leadership memory capacity and compute performance. The next generation AMD CDNA™ 4 architecture, planned for 2025, is expected to bring up to a 35x increase in AI inference performance compared to AMD Instinct accelerators based on AMD CDNA 3.
AMD announced the AMD Ryzen AI 300 Series processors, the company's third generation processor for AI PCs, with industry-leading 50 TOPs of AI processing power for Windows Copilot+ PCs. OEMs including Acer, ASUS, HP, Lenovo and MSI unveiled new devices powered by the lineup.
AMD and industry leaders announced the Ultra Accelerator Link promoter group which will leverage AMD Infinity Fabric™ technology to advance open standards-based AI networking infrastructure systems.
Cloud providers showcased offerings powered by AMD Instinct MI300X accelerators, with Microsoft announcing the general availability of new Azure ND MI300X V5 instances, which provide leading price/performance for GPT workloads.
AMD launched the Radeon™ PRO W7900 Dual Slot GPU for high-performance AI workstations and expanded AMD ROCm™ 6.1.3 software support to enhance AI development and deployment with select AMD Radeon desktop GPUs.
What all that means, is more powerful AI-focused tech for data centres, including cloud services companies (Azure) for devices specifically aiming at Windows Copilot devices and as the company puts it, AI infrastructure.
It does put AMD right up there in terms of tech and a legitimate contender to Nvidia.
Which then turns us to what might be coming for Nvidia. Considering its stock price just dipped below $100, is this the last chance you’ll have to see Nvidia under $100?
As I noted earlier in the week, the wild action in the market has made a lot of quality stocks a lot cheaper. And Nvidia’s stock price has been in somewhat of a freefall ever since…
… THIS HAPPENED in June which we wrote about:
But if Nvidia, like AMD, is going to surprise earnings expectations by a country mile, and the market figures its business out and the dust settles from the wild action this week, Nvidia at sub-$100 might become a thing of the past.
I think the question you need to ask for yourself and your decision making on both AMD and Nvidia is simple.
Are these two the tech leaders of an AI future? And if so, is the ongoing demand for their tech going to continue, plateau or retreat?
Answer those and the heavy lifting of your decision-making process is complete.
AI gone wild 🤪
So, I have a problem.
I’m moving (again). More on that in the coming weeks…
But it means changing regions/countries. Having already changed regions/countries in the last year has been hard enough.
It’s meant new phone numbers, new utilities connections, residency and visa things, just a whole lot or “operational nightmares” as I like to put it.
Maybe I’m a glutton for punishment but I decided with the family that we’re going to do all that again.
Aside from the regular “operational nightmares”, I’m in the midst of one of the biggest headaches: all the streaming and TV services.
I’m old enough to remember a time when what was on TV was whatever the programming boffins at the terrestrial channel providers decided it was.
That might have been NBA Action on a Saturday early afternoon, or Samurai Pizza Cats at 7.30am during Agro’s Cartoon Connection (Australia in the 90s was something else…).
Either way, telly was controlled by a dial on the square box, and you watched what was on and nothing else. If you wanted to see a “new release” movie it was down to the video shop to get an “overnight” VHS or a bunch of “weeklies”.
Eventually that became DVDs, but again, you get the idea, because you probably did it too.
Then “Pay TV” came along. In Australia it was called Foxtel, but it was really just the Aussie version of what you know as Sky in the UK, all from the world’s media dictator (and related companies) Rupert Murdoch and co.
In the early days, Foxtel (read: Sky) promised the holy grail of TV… programming with no ads.
Yes, you read that right, NO, ADS.
And early on that’s why people bought it. You could also choose what you wanted to watch with much greater variety and depth. Five terrestrial channels all of a sudden became 100. That included dedicated sports channels and movie channels!
Well, Pay TV soon became the best and most lucrative way for advertisers to advertise into your eyeballs, so that ad-free time ended abruptly.
Another selling point of Pay TV was the “all in one place” aspect. You’d just fire up the box, and all your choices were there front and centre.
Then streaming came along.
And that mean apps, so, many, apps!
Netflix, then Amazon, then Apple, Disney, Max, Hulu, Paramount, Discovery, there are more, but honestly too many to mention now.
I have far too many subscriptions too. And you can’t just take them from one country to another. It requires ending and restarting and just HASSLE.
If only it was easier to just manage everything at once, in one place and do away with the ads and just make things easier.
Well, maybe Google is onto it, and it’s through the integration of its Gemini AI that might be the answer.
See below for what I mean.
I won’t lie, I like this in concept.
However, I also fear it goes the way of Pay TV, and that it really just ends up as another way to inject AI and ,worse, AI advertising into my eyeballs.
So, this AI looks promising, but deep down, I’m a bit scared of what it becomes, or the iteration of what comes after it.
Still, like my Alexas, I’ll probably buy it, use it for a while and then once I get sick of being advertised endlessly for upgrades, I don’t want, I’ll throw it out.
In the meantime, I’m off to cancel a lot of streaming services, which is going to upset two little dudes, until they (some of them) come back when we arrive in our next destination.
Boomers & Busters 💰
AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).
***As you’d expect, not much booming still this week…but here’s the roll call of some of the best anyway.
Boom 📈
Appen (ASX:APX) up 7%
Taiwan Semi (NYSE:TSM) up 3%
AMD (NASDAQ:AMD) up 1%
Bust 📉
Bigbear.ai (NYSE:BBAI) down 20%
Tesla (NASDAQ:TSLA) down 15%
C3.ai (NYSE:AI) down 10%
From the hive mind 🧠
What if, just what if… all along God was AI? Of course that’s unlikely, or is it? Still, I bet there will be some people that take their AI obsession too far, and what does that mean for civilisation?
Remember that time in 2023 when I said this devices was NOT the future of AI devices? Well, again, some proof we were right as the returns are now outpacing the sales.
Microsoft, Palantir and national security operations. Seems just fine, right? RIGHT? This announcement seems nonchalant, but I think there’s a lot more to it than first meets the eye. Something to keep an eye on me thinks.
Artificial Polltelligence 🗳️
Time for a new poll.
Considering the wreck of a market we had on Monday, it’s a similar question to the week before…
Actually, it’s the same question, but now you have more information. I wonder if that changes the vote at all?
Weirdest AI image of the day
Alternate Olympic medals – r/weirddallee
ChatGPT’s random quote of the day
"The next big thing is the one that makes the last big thing usable." — Blake Ross
Thanks for reading, and don’t forget to leave comments and questions below,
Sam Volkering
Editor-in-Chief
AI Collision
Project Aurora doesn't look promising. I read it's project was turned down by Ohio in the US and it may be broke. BWXT sounds better for nuclear stuff.