Nvidia leads in AI chip market, outperforming AMD due to software advantage and revenue growth.

From Nasdaq: 2024-12-30 04:50:00

Graphic processing units (GPUs) are crucial for artificial intelligence (AI) infrastructure, providing high-speed processing power for training and inference. Nvidia dominates the market, with its stock up 175% in 2024, while AMD struggles. Demand for GPUs is rising, especially in cloud computing and AI model training, benefiting Nvidia.

Despite AMD’s competitive hardware, independent testing shows its software limitations compared to Nvidia, impacting real-world performance. Nvidia’s data center revenue far surpasses AMD’s, with Nvidia leading in AI training. AMD may find success in AI inference due to lower costs, but Nvidia’s software advantage remains a key strength.

From a valuation perspective, AMD appears cheaper with a forward P/E ratio of 24 compared to Nvidia’s 31. However, Nvidia’s faster revenue growth makes it a more attractive investment. As AI training remains vital, Nvidia’s stock is preferred for potential profitability in 2025. Investors may still have opportunities to benefit from Nvidia’s growth.

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Read more at Nasdaq: Nvidia vs. AMD: Which Is the Better AI Chip Stock for 2025?