AMD secures Saudi AI deals to compete with NVIDIA in data center sector

From Nasdaq: 2025-05-15 15:00:00

Advanced Micro Devices, Inc. AMD is challenging NVIDIA Corporation NVDA in the data center sector, securing deals with major clients like Saudi Arabia’s Humain. This move raises questions about AMD’s potential to outperform NVIDIA in the long term. Semiconductor companies are now optimistic about AI hardware spending due to new deals with Saudi Arabia.

AMD has entered a $10 billion partnership with Saudi AI firm Humain to expand its AI infrastructure. NVIDIA has also partnered with Humain, selling over 18,000 AI-focused chips worth nearly $700 million. NVIDIA plans to power a 500-megawatt data center in Saudi Arabia with its GB300 Blackwell chips, countering export restrictions to China.

Bank of America Corporation analyst Vivek Arya estimates that NVIDIA and AMD’s partnership with Humain could be worth $15 billion to $20 billion over the next five years. While AMD can compete with NVIDIA on price, large companies may opt for cost-effective AI infrastructure solutions using AMD’s chips, posing challenges to NVIDIA’s dominance.

Brokers have raised NVIDIA’s average short-term price target by 27.8% to $166.10, while AMD’s target increased by 13.8% to $128.03. Despite AMD’s potential in the data center sector, NVIDIA’s stock is likely to benefit from increased AI data center spending due to the popularity of its CUDA software platform and high demand for its Blackwell chips.

AMD’s recent $6 billion share repurchase program and the Saudi AI deal have positioned the company for potential growth. While AMD stock is expensive with a forward earnings multiple of 28.7X, new entrants should wait for a more affordable price. AMD stock currently has a Zacks Rank #3 (Hold), and stakeholders should monitor its performance for future investment opportunities.



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