From Nasdaq: 2024-04-12 05:05:00

The chip market has seen significant growth due to increased demand for more powerful hardware driven by the rise in artificial intelligence (AI) services. Nvidia and AMD have seen stock gains of 222% and 84% since last April, positioning them well in the AI sector, with projected industry growth to almost $2 trillion by 2030.

Nvidia has dominated the AI chip market, holding an estimated 90% market share in GPUs, leading to a 265% increase in revenue in its fourth quarter of 2024. The company’s free cash flow surged by 430% in the last year, reflecting its strong position in the industry and ability to invest in AI.

AMD, while slightly behind Nvidia in AI, has shown promise with partnerships and the launch of its MI300X GPU for AI. AMD’s focus on AI-powered PCs aligns with industry growth projections, with AI-enabled PCs expected to make up 60% of all shipments in 2027. Revenue for AMD’s AI-focused data center segment rose by 38% in its last quarterly report.

Earnings-per-share estimates suggest that AMD may have more room to grow in the next two years compared to Nvidia. While Nvidia is currently seen as the leader, projections indicate that AMD could see a 93% increase in its stock price over the next two fiscal years, making it a more attractive investment option in the short term.

Before investing in Nvidia, consider the analysis from the Motley Fool Stock Advisor team, which recently identified 10 top stocks for investment opportunities. While Nvidia is a notable player in the market, the identified stocks could potentially yield higher returns in the future, making it worthwhile to explore other investment options.Context: The author notes that the article is not reflective of Nasdaq, Inc.’s views.Randi Zuckerberg, former Facebook director and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Dani Cook, the author, does not hold positions in any stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, and Nvidia. The Motley Fool also offers investment recommendations and discloses its policies for transparency in reporting.



Read more at Nasdaq: Better AI Stock: Nvidia vs. AMD