Advanced Micro Devices (AMD) is exploring the development of new discrete neural processing units (NPUs) to power artificial intelligence (AI) applications, a move that could provide a new source of revenue. AMD's Client CPU Business Head Rahul Tikoo confirmed talks with customers about potential use cases for NPUs, which would be similar to its standalone graphics processing units (GPUs). This development could challenge Nvidia's dominance in the AI GPU market, as AMD aims to appeal to consumers who don't require as much power as Nvidia's AI GPUs. AMD stock has seen a 48.37% year-to-date gain and a 35.44% over-the-year performance, with analysts' consensus rating for Moderate Buy and an average stock price target of $156.47.