Microsoft has announced plans to offer AMD AI chips to its cloud computing customers in an effort to compete with Nvidia components. The company will provide more details at its Build developer conference next week and will preview its new custom Cobalt 100 processors at the event. Microsoft will offer AMD’s flagship MI300X AI chips through its Azure cloud computing service as an alternative to Nvidia’s GPUs which are in high demand.
In addition to offering AMD chips, Microsoft also sells access to its own in-house AI chips called Maia. The company’s cloud services, including Azure, are a significant revenue driver, generating over 40% of total revenue in the fiscal third quarter. Azure sales grew 31% year over year in the same period.
Analysts have a bullish outlook on Microsoft stock, with a Strong Buy consensus rating based on 31 Buy ratings and one Hold rating. The stock has increased by over 30% in the past year, and the average price target of $491.56 implies an upside potential of 17.1% from current levels. Microsoft’s cloud services continue to be a key component of its revenue and growth strategy, with the company making strategic moves to compete in the AI chip market.
Overall, Microsoft’s foray into offering AMD AI chips to its cloud computing customers is seen as a strategic move to compete with Nvidia and expand its offerings in the AI space. The company’s focus on cloud services, including Azure, has proven to be lucrative, with continued growth and strong performance in the third quarter. Analysts are optimistic about the future prospects of Microsoft stock, with a positive outlook and expectations for further growth in the AI segment.
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