To The Moon

$Advanced Micro Devices(AMD)$ has launch the Instinct MI300X Data Center GPU targeting AI and ML workloads.

AMD has increased their 2027 data center accelerator TAM from around $150bn to around $400bn. AMD officially launched its Instinct MI300X Data Center GPU targeted for AI/ML workloads

We are particularly encouraged by META’s plans to use MI300X for inferencing, as we believe

META’s plans to use MI300X for inferencing internal workloads will be an important milestone for AMD for sustained volume ramps in the near term.

Data Center Accelerator Market Size

AMD is already one of the Major Player in the Data Center Accelerator market which has a market size of USD 9.89 billion, it is set to grow at a CAGR from 2023 to 2028 at 14.19%.

May 2022 - AMD has announced the completion of its acquisition of Pensando Systems for about USD 1.9 billion. Pensando's distributed services platform would add a high-performance data processing unit (DPU) and software stack to AMD's data center product range, which is currently being used at scale by cloud and business clients such as Goldman Sachs, IBM Cloud, Microsoft Azure, and Oracle Cloud.

Source: https://www.mordorintelligence.com/industry-reports/data-center-accelerator-market

Data Center Accelerator Market Leaders

If the adoption for AMD’s MI300 gets wider, we can see AMD move up the market leaders, and I believe more and more companies with large language models would look at AMD to improve their inference capabilities.

Advanced Micro Devices (AMD) Seasonal Volatility by Day of Year

Historically, implied volatility for AMD tended to rise the most in October with a median IV Of 61.8, while November tended to be when implied volatility declined To its lowest levels With median IV Of 46.7.

Historically, the median IV for the current month of December was 51.3 compared to the current IV of 37.1. The IV level in January following December tended to be higher, with a median IV of 58.7.

Advanced Micro Devices (AMD) IV Percentile Rank

AMD implied volatility (IV) is 37.1, which is in the 4% percentile rank. This means that 4% of the time the IV was lower in the last year than the current level. The current IV (37.1) is -2.0% below its 20 day moving average (37.9) indicating implied volatility is trending lower.

Advanced Micro Devices (AMD) IV vs 20-Day HV

The current IV (37.1) in AMD is 14.6% above its 20 day HV (32.4) suggesting that options markets are predicting future volatility to trade above the most recent 20 day realized volatility.

Advanced Micro Devices (AMD) Volatility Skew

The implied volatility skew shows the market's bias for pricing in volatility risk to the option premium of downside puts and upside calls.

The implied volatility for downside puts is decreasing relative to upside calls, then that suggests the market is pricing in a larger positivity to an upside move.

The current skew indicator suggest a slightly bullish upside move.

Summary Volume and Price by Trading Session for AMD

The VWAP price for the premarket session was $119.97, which was a $3.15 increase over the prior closing price. Premarket volume was 221% above the 30-day average, with 1,593,627 total shares.

The opening auction price ticked up from the premarket to $120.79, on a much higher volume than typical for the last 30 days. The stock showed strength after the open, with the VWAP price up $4.62 to $125.41. The trading volume was higher than normal, with a total share count 137% above the 30-day average.

The closing auction price traded higher to $128.37, with a significant jump in volume compared to the average. The stock continued to climb into the after hours, with a VWAP of $128.47 for the session. Volume was high after hours, trading at 1.2 times the 30-day average.

Summary

Based on the data I have gathered, I believe there will be more companies who will announced plans to use AMD’s MI300, especially companies with huge LLMs. This will help AMD to create a benchmark on different LLMs.

We will have to see how it can really perform among the best and huge LLMs. I would foresee AMD having a slightly upside run over the next week.

I am looking to increase my position in AMD.

Appreciate if you could share your thoughts in the comment section whether you think AMD would benefit from more companies adopting its latest MI300?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.