Investors often associate artificial intelligence (AI) chips with Nvidia (NASDAQ: NVDA), the top producer of GPUs for data centers used in AI tasks. Advanced Micro Devices (NASDAQ: AMD) is challenging Nvidia with its own data center GPUs. AMD’s recent advancements and competitive pricing make it a potential threat in the AI chip market.

Nvidia dominates 94% of the discrete GPU market, while AMD holds a smaller 6% share. AMD’s latest MI300 GPUs outperform Nvidia’s older H100 in raw processing power and memory bandwidth. AMD’s strategic pricing and performance could attract customers looking for cost-effective AI solutions.

AMD’s AI business growth has slowed due to export restrictions and competition from Nvidia. However, recent deals with Oracle and OpenAI indicate a promising future. Analysts predict a 30% revenue and 86% EPS growth for AMD from 2024 to 2027. While AMD may not surpass Nvidia, its unique offerings could position it as a significant player in AI chips.

The Motley Fool Stock Advisor team identified Advanced Micro Devices as a potential growth stock. While not a current recommendation, AMD’s potential in the AI chip market could lead to significant returns. Consider joining Stock Advisor for access to their top 10 stock picks and historical performance data to make informed investment decisions.

Read more at NASDAQ.: Could Advanced Micro Devices Become the New Growth Story in AI Chips?