From Nasdaq: 2024-06-19 06:45:00

Chip stocks, crucial for AI development, are in the spotlight. Advanced Micro Devices (AMD) competes with market leader Nvidia, showing promise with a 28% rise in stock. However, AMD’s recent earnings show a struggle against Nvidia’s growth, despite segments like data centers posting revenue growth above 80%. Advanced Micro Devices currently faces challenges in breaking through Nvidia’s estimated 90% market share in AI GPUs.
Comparisons between AMD, Nvidia, and Intel show AMD’s stock has surged over the past decade, but it faces tough competition in 2024. Nvidia dominates the AI chip market, while Intel’s expansion in chip manufacturing could be profitable. AMD lacks a niche in AI but has potential in gaming, data centers, and personal computers. Despite this, AMD’s recent earnings have not instilled confidence in its immediate future, with a 37% drop in free cash flow and a higher price-to-earnings ratio compared to Nvidia and Intel. History suggests long-term investment in AMD may still be viable, but there are potentially better options for reliability and value. The Motley Fool Stock Advisor team does not consider AMD one of the 10 best stocks to buy now, providing recommendations that could yield high returns in the future. Considerations are made based on historical recommendations, with Nvidia’s significant growth since its inclusion on the list in 2025 as a key example. This suggests following Stock Advisor’s guidance may lead to substantial returns over time.



Read more at Nasdaq: Is It Too Late to Buy AMD Stock?