AI industry growing, high demand for semiconductor chips benefits Nvidia and AMD, Nvidia leading market share.

From Nasdaq: 2024-08-26 09:03:19

1. The AI industry is rapidly growing, with estimates predicting a market value of nearly $2 trillion by the end of the decade. This growth has led to increased demand for high-end semiconductor chips, benefiting chip stocks like Nvidia and AMD.

2. Nvidia leads the AI chip market with a 90% market share, resulting in a 650% increase in stock value over the past two years. AMD, on the other hand, has seen a 67.5% return in the same period, prompting comparisons of which stock is a better buy.

3. AMD’s acquisition of ZT Systems for $4.9 billion aims to expand its AI chip portfolio and meet the increasing demand for robust server systems. This move is expected to contribute to AMD’s top line and increase its annual sales.

4. Nvidia’s rapid growth is evidenced by strong demand for GPUs, leading to significant revenue and operating income increases. Wall Street expects Nvidia to continue this growth trajectory, with forecasted sales reaching $150.6 billion in fiscal 2026.

5. Analysts suggest that while both Nvidia and AMD have favorable price target estimates, Nvidia may be the better investment choice due to its leadership in the GPU market, higher growth rates, and lower valuation. Nvidia’s expected data center sales far surpass AMD’s AI chip sales forecast.



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