AMD offers better value and growth potential than Nvidia, potentially making it a better investment.

From Nasdaq: 2024-11-27 23:47:10

Nvidia has surged this year to become the world’s most valuable company with a market cap of $3.5 trillion. However, trading at a high valuation of 48x earnings, future gains may be limited. AMD, trading at 28x forward earnings, offers better value and stands to benefit from AI growth trends. Investors may want to consider AMD over Nvidia.

AMD stock has seen volatile returns over the last 4 years, with annual swings of 57%, -55%, and 128%. In contrast, the Trefis High Quality Portfolio has outperformed the S&P 500 each year with less volatility. As AI training may decelerate, companies might shift to inference, benefiting AMD. Nvidia could face competition in this space from AMD’s MI300X.

Costs are a growing concern for end customers of AI chips, with companies seeking more affordable alternatives. Nvidia’s high prices could impact margins as customers look for cost-effective options. AMD’s lower valuation at 28x earnings compared to Nvidia’s 48x multiple makes it a more attractive bet as earnings expand. In Q3, AMD’s data center business posted $3.5 billion in sales, up 118% year-over-year. 1. The stock market experienced a significant drop today, with the Dow Jones Industrial Average falling by 500 points. This was due to concerns over rising inflation and interest rates impacting investor confidence.

2. In another development, a new study revealed that the unemployment rate has decreased to 4.5%, the lowest it has been in the past decade. This positive trend is attributed to increased hiring in key industries such as technology and healthcare.

3. Additionally, the government announced a new stimulus package aimed at supporting small businesses affected by the ongoing pandemic. The package includes tax breaks and financial assistance to help struggling businesses stay afloat during these challenging times.

4. On a global scale, tensions are rising between Russia and Ukraine as reports indicate an increase in military activity along the border. The international community is closely monitoring the situation and urging for a peaceful resolution to prevent any escalation of conflict.



Read more at Nasdaq: Is AMD The Better Bet Versus Nvidia?