AMD bets on local AI, but Wall Street demands proof

AMD has long made chips for large data centers, where AI models are trained and run. Now the company is also betting that artificial intelligence should be able to run directly on the individual computer or device, instead of everything having to be sent to a server somewhere else entirely.

One way this is happening is that the AI service Perplexity can now run on ordinary Windows computers equipped with AMD's Ryzen AI Max processors. AMD has also launched a new chip called Ryzen AI Embedded X100, aimed at so-called "agentic AI," where a program can carry out tasks on its own without a person having to steer every step.

The idea is that AI tasks can be handled faster and more cheaply locally on the machine, instead of data having to be sent back and forth to large data centers.

The investment bank Piper Sandler is positive and has set a price target of $600 for AMD stock, signaling a belief that AMD can take a big bite of the market for AI infrastructure.

But there is also skepticism. AMD CEO Lisa Su recently sold 70,000 shares at an average price of $506.80, and another top executive has announced similar sales. Such sales are often part of fixed, pre-planned arrangements and need not mean anything alarming, but they make some investors ask whether management itself thinks the stock has become expensive.

The core of the story is that AMD's stock has risen sharply this year on expectations of AI growth. Now Wall Street is waiting for proof that the expected demand will actually turn into sales and profits, not just promising demonstrations. As one analysis puts it, technological enthusiasm often runs far ahead of the financial results.

For ordinary consumers, the development may mean that more AI features will in future run directly on your own laptop or desktop computer, which can make them faster and more private because data does not necessarily have to be sent to a cloud service.

What this means for you

If you use a newer computer with an AMD Ryzen AI chip, you may over time find that AI tools such as Perplexity run faster and more directly on your own machine. That can provide more privacy, because your data is not necessarily sent to a cloud service. If you are about to buy a new computer for AI use, it is worth checking whether it has this type of chip built in.