AMD is a more favorable investment option in the AI market compared to Alphabet.

From Nasdaq:

The artificial intelligence (AI) market continues to grow, hitting $200 billion last year with a projected $2 trillion valuation by 2030. With investment opportunities abound, companies like Advanced Micro Devices (AMD) and Alphabet (GOOGL) are poised to benefit from AI’s growth. AMD has made significant strides in AI hardware, while Alphabet has faced setbacks with its AI software, making AMD a more favorable investment option for now.

AMD’s stock has surged 43% this year, driven by its pivot to AI and the introduction of the MI300X AI GPU to compete with Nvidia. Despite heavy investment in AI, AMD’s financials are positive, with a 10% revenue increase in Q4 2023 and growth in its AI data center and client segments. Alphabet, on the other hand, holds a top spot in the tech industry, but recent AI software issues have impacted its stock performance.

Earnings per share (EPS) estimates suggest that AMD may outperform Alphabet in the next two years, making it a more attractive investment opportunity in the AI market. Considering forward price-to-earnings ratios, AMD’s projected stock price could rise by 98% compared to Alphabet’s 30% increase by fiscal 2026. Given AMD’s more stable position in AI and growth potential, it currently stands out as the better choice for investors.

Alphabet, known for its popular brands like Google and YouTube, holds a significant market share in digital advertising but has faced challenges with recent AI developments. Despite setbacks, Alphabet generated nearly $70 billion in free cash flow last year, positioning the company to continue investing in its AI technology to compete with industry rivals like Microsoft and Amazon.



Read more at Nasdaq: Better AI Stock: AMD vs. Alphabet