Advanced Micro Devices, Inc. (AMD) has officially entered mass production for its MI325X AI chip, marking a significant milestone in its AI ambitions. In a forward-looking move, AMD is also preparing the next-generation MI350 series, slated for release in 2025. These developments come amid a pivotal earnings season, where investors are closely watching how AI investments are impacting growth across the S&P 500.
According to analysts, S&P 500 earnings are expected to rise by 5.3% this quarter, a notable deceleration from the 13.2% increase in Q2. However, the technology and communication services sectors remain standout performers, with technology earnings anticipated to grow by 15.4%. This surge is largely driven by AI innovations, which have fueled robust market gains. The S&P 500 has risen by 21% year-to-date, largely due to the exceptional performance of tech and communication companies.
Howard Chan, CEO of Kurv Investment Management, emphasized that the key to success in the AI space lies in how effectively companies monetize their AI investments. Meta, for example, saw a notable boost in share prices due to strong sales growth driven by its AI-backed digital ad revenues. On the other hand, Google’s heavy spending on AI technologies has sparked questions regarding its ability to fully integrate AI into its core business model.
As the S&P 500 trades at 22.3 times future earnings, well above its long-term average of 15.7, analysts are optimistic that upcoming third-quarter earnings will justify current valuations. Solita Marcelli from UBS Global Wealth Management noted that the semiconductor sector, in particular, could see substantial gains due to its integral role in AI advancement.
With AMD pushing forward in AI semiconductor development, investors are watching closely to see how these technologies will drive the company's growth in the coming years, as AI continues to reshape the tech landscape.
According to analysts, S&P 500 earnings are expected to rise by 5.3% this quarter, a notable deceleration from the 13.2% increase in Q2. However, the technology and communication services sectors remain standout performers, with technology earnings anticipated to grow by 15.4%. This surge is largely driven by AI innovations, which have fueled robust market gains. The S&P 500 has risen by 21% year-to-date, largely due to the exceptional performance of tech and communication companies.
Howard Chan, CEO of Kurv Investment Management, emphasized that the key to success in the AI space lies in how effectively companies monetize their AI investments. Meta, for example, saw a notable boost in share prices due to strong sales growth driven by its AI-backed digital ad revenues. On the other hand, Google’s heavy spending on AI technologies has sparked questions regarding its ability to fully integrate AI into its core business model.
As the S&P 500 trades at 22.3 times future earnings, well above its long-term average of 15.7, analysts are optimistic that upcoming third-quarter earnings will justify current valuations. Solita Marcelli from UBS Global Wealth Management noted that the semiconductor sector, in particular, could see substantial gains due to its integral role in AI advancement.
With AMD pushing forward in AI semiconductor development, investors are watching closely to see how these technologies will drive the company's growth in the coming years, as AI continues to reshape the tech landscape.