It is reported that the MI350 series AI chips may increase in price by 70%, and AMD's stock price responded by rising

According to reports, after AMD (AMD.US) is considering raising the average selling price of its Instinct MI350 series AI chips from $15,000 to $25,000, AMD's stock price rose 4.32% on Monday.

The report states that although the increase is significant—reaching 70%—it is still cheaper than NVIDIA's (NVDA.US) comparable product, the Blackwell B200. In terms of performance, the Instinct MI350 series AI chips are said to compete with NVIDIA's Blackwell B200 AI chips and have always been one of AMD's flagship products. The report indicates that this price increase reflects strong demand for AMD's AI products and suggests that such a substantial price hike may also imply that the company's quarterly revenue data will show significant growth.

AMD launched the Instinct MI350 series AI chips at the Advancing AI conference in June. This series includes the MI350X and the flagship MI355X, based on TSMC's 3-nanometer process node and the new CDNA 4 architecture, integrating up to 185 billion transistors. The main difference between these two chips lies in their cooling methods, with the former using air cooling and the latter employing more advanced liquid cooling. The new chips support the latest FP6 and FP4 AI data types and are equipped with ultra-large capacity HBM3e memory.

AMD claims that a single MI350 GPU can run large models with up to 520 billion parameters, showcasing its strong capabilities in AI training and inference. The MI350 series achieves a peak computing power of 20 PFLOPS at FP4/FP6 precision, which is four times that of the previous generation MI300X, and its inference performance has improved by 35 times. When running the DeepSeek R1 model, the MI350 series' inference throughput surpassed that of NVIDIA's B200, demonstrating strong competitiveness.

It is worth mentioning that HSBC analysts previously expressed optimism about the MI350 series AI chips' ability to compete with NVIDIA's Blackwell, significantly raising their target price for AMD to $200. HSBC also expects AMD's revenue from AI chips to reach $15.1 billion by 2026, a substantial increase from the previous estimate of $9.6 billion.

Following the news of the price increase, a team led by Wells Fargo analyst Aaron Rakers reaffirmed their positive outlook on AMD and raised their sales expectations for AMD's data center GPUs. Analysts noted that AMD will release its financial report on August 5, and investors will focus on the shipping speed and coverage of the MI355X data center GPU. This new product began shipping in June.

Analysts stated, "We believe most investors expect the MI355X to be priced around $30,000." They pointed out that AMD has expressed confidence in restoring year-over-year growth in GPU revenue in the third quarter of fiscal year 2025 Analysts currently expect AMD's GPU revenue for the third quarter of fiscal year 2025 to reach approximately $1.65 billion, a slight increase year-on-year. Analysts added that this year-on-year growth expectation has already taken into account the nearly $800 million negative impact from the export ban to China on the MI308X chip in the second half of 2025. Therefore, the focus of analysts and investors is gradually shifting to whether the MI308X chip can regain shipping permission to the Chinese market in the second half of 2025