AMD Makes its Move

We’ve passed the big Nvidia big promo conference event in early 2024 which really helped stabilize support for the AI technology leader.

Their H100 Tensor Core GPU chips and CUDA system are hailed as the market leader, the standard for AI systems being built today. Investors believe it and are pouring money into the company’s stocks to give it a Magnificent 7 cap value of $2.8 Trillion. It wasn’t really about the latest GPU they’re showcasing, it’s to showcase their market leadership.

The NVIDIA conference event says “we’re the number one dominant brand in the AI chip space” and there’s no reason to buy from anyone else including AMD.”

That event serves to give the media lots of material for their news stories and gives a focus for big advertising and PR benefits. The event too, brought top buyers and influencers together for an immersive experience in the leading edge of AI computing. This means Nvidia gets to shape everyone’s belief about where AI is and where it’s going.

AMD lacked this capacity for an AI-ecosystem to facilitate more services to its chips customers.  They’ve finally responded by purchasing a Finnish artificial intelligence AI lab start-up and its 300 employees called Silo AI for $665 million. Is it enough to protect its market share and compete with Nvidia?

“The Silo deal shows AMD seeking to scale its business quickly and drive customer engagement with its own offering. AMD views Silo, which builds custom models for clients, as a link between its “foundational” AI software and the real-world applications of the technology… AMD is among several companies contributing to the development of an OpenAI-led rival to Cuda, called Triton, which would let AI developers switch more easily between chip providers. Meta, Microsoft and Intel have also worked on Triton. — Financial Times Report.

The acquisition does help AMD solve AI software and infrastructure issues it had, but does the acquisition do anything for the core problem of AMD’s weak marketing?  Well, oddly, it’s something to spark media interest in the company, so yes it does help marketing.  Every tech company needs to educate prospects, support the media, and promote their big technology wins to tech audiences.

AMD needs to up its full marketing mix and reach investors and AI hungry tech company CEOs via search, social media and tech influencers.  Perception is important, and if the media and investment community are hypnotized by Nvidia, it’s going to hamper AMDs brand and customer’s choice of ecosystems.

Market Leadership Trumps Everything Else

Leadership can’t be taken for granted and Nvidia’s marketing team knows it. Copycats will be duplicating everything Nvidia is, has and can offer. Nvidia is seeing mounting attacks on all fronts from Intel, AMD, Broadcom and even consumer companies including Apple, Facebook, and Google.

Leading companies can’t abandon marketing at any time. Because when they do, competitors pick up speed and leave them in the dust. These quiet, missing periods are key times when competitors can capture market presence, building brand, traffic and leads. When golden opportunities are handed to you, you should capitalize on them.

AMD’s stock price recovering nicely, and as the Silo AI acquisition’s meaning sinks in, the price should rise much more. Investors will start to take AMD seriously if AMD markets this capability.

AMD stock price last 6 months.
AMD stock price last 6 months. Screenshot courtesy of Google Finance.

Investment analysts were giving AMD the thumbs up even before they realized AMD was doing something serious. Now, the stock is beginning to look good.

AMD stock fundamentals courtesy of Barchart.
AMD stock fundamentals courtesy of Barchart.
AMD Stock Price Forecasts.
AMD Stock Price Forecasts. Screenshot courtesy of CNN.

Incredibly, I still like AMD and believe it can and will surmount its obvious weaknesses and evolve as a manufacturer, software provider, and marketing force. However, it will need more euphoria.

AMD Stock Sinking With No Attempt to Revive

Nvidia’s stock has held its value, but AMD stock price has fallen. It’s down more than the others which means serious investors are full of doubts about the company’s management. Before they all get canned, they should push the reset button and become a marketing-first company. Allowing the company’s brand to be blown around by winds created by Nvidia is not wise.

Investors must be persuaded, and consumers too are lead by what tech experts say about AMD. That voice has to be enthusiastic, confident and trained to support AMD’s brand and stock value.

The silence during this dropping price phase is unsettling for AMD stockholders. And many are getting out of AMD stock. The recent announcement by China that AMD chips are being banned there, doesn’t help.

How Can AMD Turn it Around?

  • get focused about the real value proposition for its products
  • focus on key markets if that’s where they say the action is (AI-powered laptops)
  • get serious about the overall marketing and brand awareness drive
  • target and reach influencers/journalists/bloggers in the AI space
  • increase advertising and promotion
  • don’t rely on the benevolence of brand fans and instead give them the material they need to promote the company (free content)
  • de-emphasize “here’s our stuff” communications for “here’s how we’re great” content
  • talk about revenue/profit picture and don’t let detractors/competitors shape AMD’s outlook
  • work with key AI technology influencers to showcase AMDs technology and popularity
  • work with gaming community to promote AMDs amazing gaming products
  • use advanced web/social analytics software to monitor key metrics such as website traffic, conversion rates, engagement, and customer acquisition costs.

Marketing Failure Will Hurt Long-Term Confidence

Failing at marketing loses a company’s fan base including influencers, experts, analysts, buyers and current customers. It’s an insidious downward spiral process that AMD’s marketing director should understand.

Lisa Su did an incredible job of taking this company from the bottom 15 years ago and building tremendous product and sales successes. However, she’s not a marketer or promoter. And that’s a big problem. Her lack of panache and believability as a star-level promoter (see Elon Musk, Steve Jobs, Richard Branson) makes the company invisible and forgettable. It’s completely dependent on its sales development team who are fully dependent on technical product superiority, which it doesn’t have.

AMD competes directly with Nvidia which pretty well lines it up for a daily beating in the media. So when Lisa Su positions it on technical superiority or niche markets (AI laptops) and up against the mighty Nvidia, it pales, and investors sell the stock. Is her silence a showing of calm confidence, frozen in fear, or a just a lack of confidence in their current marketing and communications strategy?

This long-run downward of late (-15% from the high) after the AI euphoria peak in March might not stop anytime soon.

Right now with rate cuts off the table, Americans are losing confidence in the 2024 economy. And that is certain to dampen development of AI systems and products.  High-interest rates hurt because chip development and systems require a lot of capital.

However, experts point out that we’re in the early innings of AI ball game and of course these companies including AMD will come back. At some AMD’s stock will soar and then I and many others can cash out.

AMD hasn’t shown me that they can be a market leader, only a follower behind Nvidia. And with mounting competition of strong marketing competitors, AMDs going to have their small marketshare challenged.

The point I’d like to make is that marketing and branding are powerful business tools. Value is perceived value. Nvidia’s strength built via market leadership drowns everyone else out. If you’re invisible, not in the news, and actively promoting your chip’s strengths and market niche leadership, your brand dies.

AMD has a weak marketing effort and it does affect the stock price, brand value, and future sales revenue.

They can turn it around with a more substantial paid social media and Google paid click and remarketing campaign. They connect with and reach journalists, bloggers and industry analysts via Linkedin with remarketing campaigns. They can creative useful, credible and authoritative content on their website and in content marketing using expert SEO strategy combined with visuals that show they are competitive with Nvidia, and ahead of Intel, Broadcom, and the rest of the AI wannabees.

In this case, authoritative online content does have an impact on investors and brand ambassadors.

Let’s not forget that AMD has let down their followers and fans. We’re all disappointed in AMD’s leadership right now. It’s time for them to turn it around.

See more on the 3 month, 6 month, and current stock market forecasts.