AMD: A Challenging Downcycle Emerging

AI investments to top before AMD can make hay

In our recent report, we examined NVIDIA and the significant pressures impacting its fundamentals. Since the release of our Report, our analysis has been picked up by other commentators who are now echoing what we concluded: the peak of AI-driven GPU demand may be near, and we will see a declining demand in 2025. This viewpoint is supported by observations from major industry players such as Alphabet and frank remarks from META's CEO, Mark Zuckerberg. Analysts and experts we spoke with suggest that industry is transitioning from a phase of intense capacity building for training large AI models to a focus on inference, leading to a reduction in orders. This shift will likely reverse the double orders from the hyperscalers, and a decline in revenue for AI leaders such as a NVIDIA and AMD.

Building on this groundwork, we now extend our focus to Advanced Micro Devices (AMD), a key player in the semiconductor industry that’s the center of the current boom. Despite shaving one-third its val…