From Nasdaq: 2024-11-08 06:00:00

Advanced Micro Devices (NASDAQ: AMD) reported earnings that failed to excite investors, leading to a 16% drop in stock value. Despite solid numbers, AMD has seen a 5% decline this year, while rival Nvidia (NASDAQ: NVDA) has surged over 170%. Here’s why investors should consider buying AMD shares now.

AMD’s revenue for the September quarter reached $6.8 billion, up 18% year over year, with operating income tripling to $724 million. At a forward P/E ratio of 28, AMD is cheaper than Nvidia, offering long-term growth potential and AI investment opportunities. An upcoming catalyst could accelerate AMD’s growth rate and boost investor confidence.

AMD is set to ship the MI325X chip next year, providing a competitive alternative to Nvidia’s Blackwell chips. Investors should remain bullish as demand for AI chips continues to rise, potentially driving sales growth for AMD. The market may not be pricing in this opportunity, making AMD an underrated buy.

While Nvidia dominates the chip market, customers may seek alternatives due to supply issues and vendor dependency concerns. AMD’s position as a solid No. 2 player in the industry, coupled with growing AI demand, makes it an attractive investment. CEO Lisa Su highlights the increasing investment in AI across industries.

Investors shouldn’t overlook AMD’s potential, especially with a more favorable valuation compared to Nvidia. The chip market can support both companies’ growth, presenting a lucrative opportunity for long-term investors. Consider holding both AMD and Nvidia stocks to capitalize on the industry’s growth potential.



Read more at Nasdaq: AMD Stock Falls After Earnings: 3 Reasons to Buy the Stock Right Now