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AMD Stock Soars to Record High as IBM Quantum Computing Breakthrough Boosts Investor Confidence

Sunnyvale, CA – October 27, 2023 – Advanced Micro Devices (AMD) closed trading Friday with a significant 7.6% surge in stock price, pushing its market capitalization above $410 billion for the first time. The rally was fueled by news that IBM had successfully run a critical quantum computing error correction algorithm on AMD chips, marking a significant step forward in the burgeoning field of quantum technology.

This latest achievement adds to an already impressive year for AMD, whose shares have more than doubled in value, with much of the gains occurring within the past month. AMD’s position within the S&P 500 has also dramatically improved, climbing from 44th to 21st in market capitalization ranking since the beginning of the year.

The positive momentum is largely attributed to AMD’s increasing strength in both the artificial intelligence (AI) and quantum computing sectors. Recently, a major chip agreement with AI research giant OpenAI has bolstered confidence in AMD’s technological capabilities and future financial performance. Analysts, like those at HSBC, are projecting massive growth potential for AMD’s GPU revenues, estimating a ten-fold increase over this year’s expected $7.3 billion.

Furthermore, analysts see AMD narrowing the performance gap with industry leader Nvidia in the GPU market with its MI350 series. Even Intel’s latest earnings report indirectly benefitted AMD, with strong demand in the PC and general server markets, sectors where AMD is also a key player.

The quantum computing collaboration with IBM adds another layer of excitement. IBM’s announcement that it can now run quantum error correction algorithms in real-time on commercially available AMD chips is a major milestone. Quantum computers, while promising revolutionary computing power, are highly susceptible to errors due to the instability of qubits, their fundamental building blocks. Effective error correction is crucial for unlocking the potential of quantum computing.

IBM’s research lead, Jay Gambetta, emphasized the importance of this breakthrough, highlighting that the algorithm’s successful implementation on readily available AMD chips, and at ten times the required speed, is a game-changer. The project was completed a year ahead of schedule, signaling rapid progress in the field. IBM and AMD had previously announced a collaboration in August to develop quantum computing capabilities, with IBM aiming to build a quantum computer named Starling by 2029.

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