Key Takeaways
- Advanced Micro Devices (AMD) is positioned to capture further data centre market share from Nvidia, driven by the strong performance of its MI300X accelerator and the anticipated roadmap towards future-generation products.
- The narrative surrounding NaaS Technology Inc. (NASDAQ: NAAS) appears confused in public discourse; it is a significant player in the Chinese electric vehicle (EV) charging market, not in the US robotaxi sector.
- AMD represents a direct, execution-dependent play on the AI compute build-out, with its primary risk centred on competition and maintaining its technological cadence.
- NaaS offers a derivative play on the electrification of transport, a vast but geopolitically sensitive market, with risks tied to Chinese economic conditions and the profitability of charging infrastructure.
- Investors should distinguish between the clear-cut hardware cycle fuelling AI and the more complex, operationally-intensive path of building out physical EV infrastructure.
As the market seeks durable growth vectors for 2025 and beyond, attention is coalescing around key technology infrastructure providers. Two companies often mentioned in this context are Advanced Micro Devices and NaaS Technology Inc., yet they represent fundamentally different propositions: one is a direct challenger in the high-stakes AI semiconductor market, while the other is an indirect play on the global shift to electric mobility. While AMD’s path is paved with intense but well-defined competition, the investment case for NaaS requires a careful deconstruction of its actual business model from the more speculative narratives surrounding it.
AMD: Executing on the AI Data Centre Challenge
Advanced Micro Devices continues its strategic push into the lucrative data centre market, a domain long dominated by Nvidia. The core of its current challenge rests on the Instinct™ MI300 series of accelerators, particularly the MI300X. The market’s positive reception is predicated on its competitive performance in AI training and inference workloads, offering a viable alternative for hyperscalers and enterprises seeking to diversify their supply chains and mitigate concentration risk.
The company’s recent financial performance underscores this momentum. For the first quarter of 2024, AMD reported a significant ramp in its Data Centre segment, with revenues reaching a record $2.3 billion, an 80% year-over-year increase driven primarily by shipments of the MI300X GPU. [1] This performance has led AMD to raise its full-year 2024 data centre GPU revenue forecast from $3.5 billion to over $4 billion, a clear signal of confidence in its production and adoption rates. [2]
The Road Beyond MI300
While the MI300 series is the key catalyst for 2024, sophisticated investors are already looking towards its successor, speculatively dubbed the MI350. The expectation is that AMD will maintain an annual product cadence to keep pace with Nvidia’s own aggressive roadmap. Success will be measured not just by raw performance, but by the maturity of AMD’s software ecosystem, ROCm, which remains a critical factor for developer adoption. Any perceived stumble in this cadence or a failure to close the software gap could temper enthusiasm.
Analyst sentiment reflects this optimistic but watchful stance. Mizuho Securities, for example, highlighted AMD’s potential to capture a low-to-mid-teens percentage of the data centre AI accelerator market by 2025, a significant gain from its current position. [3] This outlook is largely priced into the stock, placing immense pressure on execution.
| Metric | Q1 2024 Result | Key Driver | Forward Guidance (FY 2024) |
|---|---|---|---|
| Data Centre Revenue | $2.3 billion (+80% YoY) | AMD Instinct™ MI300X GPU Shipments | Data Centre GPU Revenue forecast > $4 billion |
| Gross Margin (Non-GAAP) | 52% | Favourable product mix (Data Centre) | Expected to be ~53% for Q2 2024 |
Data sourced from AMD Q1 2024 earnings release.
NaaS Technology Inc: A Misunderstood Infrastructure Play
The second name, NaaS Technology Inc. (trading under the ticker $NAAS, sometimes misidentified as NBIS), presents a more complex picture. Public chatter sometimes associates the company with speculative ventures like US-based robotaxi deployment. This is factually incorrect. NaaS operates primarily in mainland China as one of the country’s largest and fastest-growing electric vehicle charging service providers.
Its business model is not building cars, autonomous or otherwise. Instead, it provides an integrated platform for charger manufacturers, operators, and EV drivers. This includes online and offline charging solutions, hardware, software, and value-added services like interoperability across different charging networks. It is an infrastructure and network-effect play, analogous in some ways to a payment processor for the EV charging ecosystem.
The Reality of EV Charging in China
The opportunity for NaaS is undeniably large. China is the world’s biggest EV market, and the supporting infrastructure required is vast. However, the business is capital-intensive and operates in a highly competitive, fragmented market. Profitability for charging station operators has been historically elusive, a challenge NaaS aims to solve by improving station utilisation and offering ancillary services. [4]
Unlike AMD’s global battle with a single clear rival, NaaS’s fate is intrinsically tied to the health of the Chinese economy, consumer EV adoption rates, and domestic policy. The risks are therefore more macroeconomic and geopolitical than purely technological. While the company provides critical infrastructure for the future of mobility, it is a fundamentally different risk-reward proposition than a high-margin semiconductor designer. It is a bet on the operational plumbing of electrification, not on the headline-grabbing technology of autonomous vehicles.
Conclusion: Distinguishing Between Hype and Hardware
Comparing AMD and NaaS is an exercise in contrasting two different layers of the technology stack. AMD offers a relatively straightforward, albeit challenging, investment thesis: can it successfully execute its product roadmap to take a meaningful slice of the AI compute market from a formidable incumbent? The metrics for success are clear: market share, revenue growth, and margins.
NaaS is a far more opaque and indirect play on a secular trend. Its success depends on navigating the complex operational and economic landscape of China’s EV market. The narrative confusion surrounding its business model serves as a useful reminder of the need for rigorous due diligence, particularly when speculative themes like robotaxis are invoked.
As a final hypothesis, the market may be systematically underestimating the operational difficulty of scaling physical infrastructure (like EV charging) compared to the more scalable, high-margin business of designing semiconductors. While both are “picks and shovels” plays, the former involves navigating immense physical-world friction. Consequently, while AMD’s upside is constrained by a powerful competitor, NaaS’s primary constraint may be the fundamental economics of its chosen industry. The clearer, if more competitive, path may ultimately belong to the hardware provider.
References
[1] AMD. (2024, April 30). AMD Reports First Quarter 2024 Financial Results. Advanced Micro Devices, Inc. Retrieved from https://ir.amd.com/news-events/press-releases/detail/1192/amd-reports-first-quarter-2024-financial-results
[2] TipRanks. (2024). Advanced Micro Devices (AMD) Stock Forecast & Price Target. Retrieved from https://www.tipranks.com/stocks/amd/forecast
[3] Beltran, V. (2024, May 1). Mizuho’s Top Analyst Sees a Strong Trajectory for AMD Stock; Reiterates a Buy Rating. Yahoo Finance. Retrieved from https://finance.yahoo.com/news/mizuhos-top-analyst-sees-strong-122100502.html
[4] Stock Analysis. (2024). NaaS Technology Inc. (NAAS) Stock Price, News & Analysis. Retrieved from https://stockanalysis.com/stocks/naas/
