Chip maker Advanced Micro Devices (NASDAQ:AMD), which has struggled in recent years to compete with both sector titan Intel (NASDAQ:INTC) and the rapidly growing upstart Nvidia (NASDAQ:NVDA), has enjoyed a serious upswing in the last couple of years, sparking a huge jump in AMD stock. But AMD stock, like its rivals, has been hit hard by the downturn of the last few trading sessions. Is the party over or is this a buying opportunity?

AMD’s core problem has always been the overwhelming resources of Intel, which dominated the processor market before anyone had heard of the internet. In the last two years, however, improvements in AMD’s products have enabled the company to gain significant market share.

AMD’s most recent quarterly report tells a very positive tale. In the second quarter, the company’s revenue surged by an eye-popping 52% year-over-year. The main reason for the renaissance of AMD stock  is that many in the industry think AMS’s EPYC server chips are faster and more efficient than Intel’s competing Xeon product.

AMD has been gaining on Intel, not just in personal and business devices, but in the data center sector, where Intel had completely dominated until quite recently.

Intel recently announced that the production of its ten nanometer chips would be delayed. That development could allow AMD to gain even more ground. And AMD has a new seven nanometer server chip that it plans to launch in 2019. The new chip will be compatible with more kinds of computing systems than previous chips.

Competing With Nvidia

Nvidia has carved out a strong position in certain niche markets, as its chips are being widely used in video games, robotics, and other applications. It moved aggressively earlier this year in the AI market by rolling out its HGX-2 platform, which puts 16 of Nvidia’s Tesla chips into one server.

But Nvidia is heavily involved in the cryptocurrency market, which relies on an enormous amount of computing power, and demand for cryptocurrencies has been fading in 2018.

Meanwhile, AMD’s increased cash flow has enabled it to accelerate its research into more specialized kinds of chips. This may allow it to compete more aggressively in some of the markets currently dominated by Nvidia.

Nvidia just released its Turing RTX graphics cards, giving the company a high-quality set of GPU products. The RTX is designed to compete with AMD’s Radeon cards. Whether potential customers will make the switch to NVDA is one of the key questions that will be resolved in the computing market over the next 12 months.

The ultimate question is whether AMD’s recent growth is sustainable. Has the company really shaken off its long history of mediocrity or is it just benefiting from Intel’s tough luck?

AMD stock recently found support above its 50-day moving average, an important technical indicator. Its price-earnings ratio of 85 may seem pricey, but high-tech firms with explosive growth prospects have been known to sustain such levels. With the broader market heading into uncertain territory, AMD stock should still be bought by investors who are willing to sign up for a potential roller coaster ride.

The author does not own any of the stocks mentioned in this article.