Advanced Micro Devices (AMD) stock slipped 0.76% on Wednesday, even after the semiconductor company highlighted changes to the data center market in a blog post. The company said data center operators can run more work on fewer servers as power and space costs increase. Server consolidation means moving workloads from older systems to fewer, more capable servers.
According to Dan McNamara, AMD’s Senior Vice President and General Manager of Compute & Enterprise AI, the goal is to cut rack space and power use, while also reducing software fees, all without hurting performance. AMD says its 5th Gen EPYC chips can help drive this shift. The chips offer up to 192 cores and speeds of up to 5GHz. AMD also noted that its next 6th Gen EPYC Venice chips will reach up to 256 cores.
AMD Fires Shots at Intel
AMD highlighted the benefit of its servers over those from rival chipmaker Intel (INTC). It said a campus of 100 Intel Xeon Platinum 8280 dual-CPU servers can be cut to 14 servers using AMD EPYC 9965 CPUs while keeping the same total speed. That is an 86% cut in server count. AMD pointed out that the setup could also cut power use by 69% and three-year total cost of ownership by 41%. Using fewer cores can also lower fees for software sold by core or socket. The company noted that this gain does not apply to software priced by users, devices or other non-core units.
AMD claimed that the space and power saved through server cuts can also help firms add AI equipment. The chipmaker argued that this can allow companies to add more AMD Instinct GPUs for AI work and AMD Pensando networking. The company said this is also useful as AI work spreads across various platforms and devices. For CIOs, AMD says the gains can be tracked through server count, rack space, power use, software spend, and total cost of ownership.
Offering comparable power with fewer chips could also be a boon to AMD with tariffs in the news. Talk of increased semiconductor tariffs could make its chips more appealing to foreign customers by allowing them to order fewer chips.
Is AMD Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for AMD is Strong Buy, based on 28 Buy and six Hold ratings over the past three months. With that comes an average AMD stock price target of $647.19, representing a potential 41.2% upside for the shares. (See AMD Stock Forecast)
