AMD raises forecast for AI chip revenue and sees supplies remaining tight

FILE PHOTO: The logo of semiconductor company Advanced Micro Devices Inc (AMD) is seen on a graphics processing unit (GPU) chip in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo

(Reuters) - Advanced Micro Devices on Tuesday increased its 2024 forecast for artificial intelligence chip sales by $500 million and said supplies would remain tight through 2025, sending shares of the Santa Clara, California-based company up 7.5% in extended trading.

The AI chips designed by AMD are largely bought by cloud computing giants. Industry insiders and Wall Street view AMD's line of AI chips as one of the few potentially viable competitors to Nvidia, which dominates the market. Shares of Nvidia rose 4.7% following the AMD report.