AMD (NASDAQ: AMD) has been overshadowed by Nvidia (NASDAQ: NVDA) due to lack of data center dominance. Despite being in second place, AMD may still offer strong returns. Quarterly earnings release on Aug. 5 could lead to significant stock growth, but potential growth may already be factored into the stock price.
AMD’s diverse product range, including GPUs, CPUs, and embedded processors, limits its upside compared to Nvidia’s focus on GPUs. However, this diversity may provide a safety net in case of a sudden halt in AI spending. AMD projects 35% revenue growth for Q2, but still lags behind Nvidia’s expected 50% growth.
AMD’s stock, trading at 40 times forward earnings, is at a premium compared to Nvidia. While a solid earnings beat could boost AMD shares, investing in Nvidia may offer better long-term prospects. AMD’s second-place position and industry cyclicality make it less appealing than Nvidia.
Consideration should be given before investing $1,000 in Advanced Micro Devices. The Motley Fool’s Stock Advisor team has identified 10 top stocks, with AMD not making the cut. Historically, Stock Advisor has significantly outperformed the S&P 500, making it worthwhile to explore other investment opportunities.
Disclosure: The author may have positions in Nvidia. The Motley Fool holds positions in and recommends Advanced Micro Devices and Nvidia. The views expressed in this article are the author’s own and do not necessarily reflect those of Nasdaq, Inc. 1. The stock market reached record highs today, with the S&P 500 closing at 3,700 points, a 1% increase from the previous day. This surge was attributed to positive economic data and increased investor confidence.
2. In global news, the United Nations reported that over 820 million people worldwide are suffering from chronic hunger, marking an increase for the third consecutive year. The COVID-19 pandemic has exacerbated food insecurity, with many countries facing severe shortages.
3. On a more positive note, researchers have developed a promising new vaccine for the Zika virus, which has shown successful results in animal trials. The vaccine is a significant breakthrough in combating the mosquito-borne disease, which has affected millions of people in recent years.
4. In technology news, Apple announced the release of its latest iPhone model, the iPhone 12, featuring 5G connectivity and improved camera capabilities. The new phone is expected to drive sales for the tech giant and further solidify its position in the smartphone market.
5. Lastly, in sports news, the NBA announced plans to start the upcoming season on December 22nd, following a shortened offseason due to the COVID-19 pandemic. Teams will play a reduced 72-game schedule, with health and safety protocols in place to protect players and staff.
Read more at Nasdaq: Will AMD Stock Go Parabolic After Aug. 5?