Should AMD Investors Worry About Google TPUs and the DRAM Shortage?

Shares of Advanced Micro Devices (NASDAQ:AMD) person not had a bully November, present down 18% successful the past month, acknowledgment successful portion to the AI valuation sell-off and a slew of developments that person impacted the semiconductor scene. With Google TPUs starting to measurement heavy connected shares of the GPU makers, questions linger arsenic to what the adjacent large determination successful the apical GPU players is going to be.

Combined with the DRAM shortage and the interaction connected GPU prices, I deliberation there's a batch of worldly for semi banal investors to digest arsenic we caput into the vacation season. Personally, I don't deliberation there's a ton to interest about, particularly since overmuch of the caller headlines person already worked their mode into the banal implicit these past fewer weeks.

Perhaps the biggest operator of the latest sell-off is little to bash with caller developments successful chips and much to bash with the extended valuation and overbought conditions going into the period of November. Either way, I'd beryllium much inclined to beryllium a purchaser than a seller of shares of Advanced Micro Devices arsenic they look to springiness backmost much of the euphoric gains enjoyed backmost successful October.

While a 114 times trailing price-to-earnings (P/E) aggregate mightiness not marque Advanced Micro Devices banal look similar a bargain, I bash find it to beryllium a large woody for those looking to proceed riding connected the outperforming GPU titan, arsenic it looks to bash its champion to support flooring it successful an effort to drawback up successful the AI spot race.

While Google TPUs bash airs a longer-term competitory menace to the GPU firms, Morgan Stanley analysts deliberation that Advanced Micro Devices isn't successful immoderate "immediate danger" from ASICs (application-specific integrated circuits). I'm much inclined to agree. The enactment has to beryllium soothing for Advanced Micro Devices shareholders arsenic shares instrumentality a dive.

Perhaps investors are overly anxious astir a reasonably distant headwind. I deliberation it's rather a agelong to deliberation that Advanced Micro Devices is successful trouble, conscionable due to the fact that of reports to usage an ASIC-based solution. In immoderate case, I deliberation the large occupation for Advanced Micro Devices is whether it has capable GPUs to spell astir adjacent year, particularly arsenic adoption looks to level up portion the DRAM shortage looks to complicate things.