Home Computing Microsoft (NASDAQ:MSFT) Challenges Nvidia with AMD AI Chips on Azure

Microsoft (NASDAQ:MSFT) Challenges Nvidia with AMD AI Chips on Azure

Microsoft (NASDAQ:MSFT) announced plans on Thursday to offer AMD’s (NASDAQ:AMD) AI chips to its cloud computing customers, competing with Nvidia’s (NASDAQ:NVDA) components. The tech giant will provide more details at its Build developer conference next week. Additionally, it will launch a preview of its new Cobalt 100 custom processors at the conference.

Details of MSFT’s Platform of AMD Chips

Microsoft will offer AMD’s flagship MI300X AI chips through its Azure cloud computing service. As a result, the company will provide its customers with an alternative to Nvidia’s H100 family of graphics processing units (GPUs), which dominate the market for AI but are difficult to procure due to high demand.

In addition to Nvidia’s chips, Microsoft also sells access to its own in-house AI chips called Maia.

Microsoft’s Cloud Services – A Key Component of its Revenues

Microsoft’s cloud services are increasingly becoming an important component of its revenues. The company’s Intelligent Cloud division, including Azure, generated $26.7 billion in revenue, which is more than 40% of its total revenue in the Fiscal third quarter. Moreover, MSFT’s Azure sales grew by 31% year-over-year in the third quarter.

Is Microsoft a Buy, Sell, or Hold?

Analysts remain bullish about MSFT stock, with a Strong Buy consensus rating based on 31 Buys and one Hold and Sell each. Over the past year, MSFT has increased by more than 30%, and the average MSFT price target of $491.56 implies an upside potential of 17.1% from current levels.

 

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