Could AMD Finally Challenge Nvidia With Its MI400 AI Chips?

Source Motley_fool

Advanced Micro Devices (NASDAQ: AMD) has built a sizable AI accelerator business over the past few years, but it's a drop in the bucket compared with market leader Nvidia (NASDAQ: NVDA). While Nvidia's data center segment generated more than $39 billion in revenue during the most recent quarter alone, AMD managed just $5 billion in AI accelerator revenue in all of 2024.

AMD's latest Instinct MI350X and MI355X graphics processing units (GPUs) are powerful, delivering four times the AI compute performance and 35 times the AI inferencing performance compared to the company's last-generation products. However, specifications and performance are in line with Nvidia's latest Blackwell-based GPUs. AMD's chips feature 288 GB of HBM3E memory and 8 terabytes per second (TB/s) of memory bandwidth, the same as Nvidia's GB300 Superchip. Raw compute performance across different types of operations is also similar to Nvidia's latest. While AMD's MI350X and MI355X are capable AI accelerators, they fail to leapfrog Nvidia.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

An AI chip.

Image source: Getty Images.

Upping the ante

In 2026, AMD will release its next-generation MI400 series AI accelerators. The company claims that the flagship MI400X will be 10 times more powerful than the MI300X, an enormous leap in just a few years. The chips will feature up to 432 GB of HBM4 memory, 19.6 TB/s memory bandwidth, and significant increases in raw computing performance.

Of course, Nvidia won't be sitting still. Nvidia's Vera Rubin chips are expected to ship in the second half of 2026, bringing significant performance gains over Blackwell. The initial Rubin AI accelerator will keep memory per GPU at 288 GB but up the bandwidth to 13 TB/s, while Rubin Ultra in the second half of 2027 pile on additional memory and bandwidth. Rubin is expected to more than triple compute performance over its predecessor.

While companies' claims about the performance of future products should be taken with a grain of salt, AMD's MI400X looks like it will be a solid contender when it launches in 2026. It should beat Nvidia's current generation of products handily in terms of performance, although Nvidia's next-gen Rubin chips may ultimately win out. One advantage AMD will have is memory, with the MI400X set to offer more capacity and bandwidth than Rubin. For certain types of workloads, that will be appealing.

In addition to MI400 family, AMD is planning to launch a new rack-scale AI solution called Helios in 2026. Helios will feature up to 72 MI400 GPUs, Venice EPYC server CPUs with up to 256 cores, and AMD's next-generation Vulcano AI network interface card to enable fast data transfer in high-density clusters. Rack-scale solutions are becoming more popular among AI infrastructure companies as they face challenges building out large enough clusters to handle the latest AI models, and Helios should be a compelling option when it launches.

Nvidia will still be tough to beat

While AMD will have far more powerful AI accelerators and a new rack-scale AI solution in 2026, Nvidia will probably remain the overwhelming market leader. Not only is Nvidia's hardware powerful, but the company's CUDA software ecosystem provides a critical competitive advantage. AMD is attempting to build out its own ecosystem with ROCm, and the latest version brings increased performance and new features to the platform. However, AMD continues to fight an uphill battle.

AMD sees the market for AI chips reaching $500 billion by 2028. With annual AI accelerator revenue at just $5 billion for 2024, the company doesn't need to beat Nvidia to vastly grow its AI chip business over the next few years. More powerful AI chips will help, as will a more fleshed-out rack-scale solution that should appeal to the largest customers of AI accelerators.

With the MI400 series and Helios slated for 2026, AMD is positioned to grow its AI-related revenue substantially over the next few years. But just like in the gaming GPU business, the company is almost certain to remain in a distant second place behind Nvidia.

Should you invest $1,000 in Advanced Micro Devices right now?

Before you buy stock in Advanced Micro Devices, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Analyst Mocks Calls For XRP Price At $1,000, Says Take Profits At This LevelCrypto analyst Jaydee has called out market participants who predict that the XRP price could rally to as high as $1,000. The analyst suggested that the altcoin can’t reach such heights and
Author  NewsBTC
18 hours ago
Crypto analyst Jaydee has called out market participants who predict that the XRP price could rally to as high as $1,000. The analyst suggested that the altcoin can’t reach such heights and
placeholder
Bitcoin Breakout Not Just Hype—$4.4B Inflows Back The MoveBitcoin has set a new all-time high (ATH) above $112,000, and if on-chain data is to go by, there is some real conviction behind the move. Bitcoin Realized Cap Shows ATH Breakout Not Just Speculative
Author  NewsBTC
18 hours ago
Bitcoin has set a new all-time high (ATH) above $112,000, and if on-chain data is to go by, there is some real conviction behind the move. Bitcoin Realized Cap Shows ATH Breakout Not Just Speculative
placeholder
Market Expert Says It’s Now ‘Illegal’ To Short Bitcoin, Here’s WhyBitcoin’s price action has shown intense strength in recent days to finally bounce fully from the weakness in late June. After briefly dipping into the low $108,000 range in the past 24 hours,
Author  NewsBTC
18 hours ago
Bitcoin’s price action has shown intense strength in recent days to finally bounce fully from the weakness in late June. After briefly dipping into the low $108,000 range in the past 24 hours,
placeholder
Bitcoin Uptrend Intact, But Binance Activity Warns Of Short-Term PullbackBitcoin (BTC) reached a new all-time high (ATH) yesterday, climbing to $111,999 on Binance exchange before dipping slightly to around $110,000 at the time of writing. While the broader trend remains
Author  NewsBTC
18 hours ago
Bitcoin (BTC) reached a new all-time high (ATH) yesterday, climbing to $111,999 on Binance exchange before dipping slightly to around $110,000 at the time of writing. While the broader trend remains
placeholder
Ethereum Price Forecast: ETH tests $3,000 following strong ETF and treasury inflowsEthereum (ETH) climbed above $2,900 on Thursday, mimicking the rally seen in Bitcoin. Amid the influence of the top cryptocurrency, strong buying pressure across ETH exchange-traded funds (ETFs) and crypto treasury companies have also pushed up ETH's price.
Author  FXStreet
19 hours ago
Ethereum (ETH) climbed above $2,900 on Thursday, mimicking the rally seen in Bitcoin. Amid the influence of the top cryptocurrency, strong buying pressure across ETH exchange-traded funds (ETFs) and crypto treasury companies have also pushed up ETH's price.
goTop
quote