In the first half of 2023, Advanced Micro Devices (NASDAQ:AMD) stock, commonly known as just AMD, was a favorite among the investing community.
People held CEO Lisa Su up as a heroic figure. However, the market seems to have forgotten about AMD stock lately. Yet, this presents an opportunity for savvy stock traders.
The main topic of discussion this year, so far, has been artificial intelligence technology. We need chips to power AI applications, and one famous chip maker is currently the focus of the financial media’s attention.
I’m not referring to AMD, as a rival chip maker has stolen the spotlight. Don’t sleep on AMD stock, though, since there’s room for a rebound and the AI chip wars are just getting started.
AMD Stock Sails and Stalls
First things first: AMD’s investors shouldn’t expect 2023’s second half to be like the first half. The first-half returns were unusual; the market couldn’t stop talking about AMD and its CEO.
Lately, however, financial traders are obsessed with AI chip maker Nvidia (NASDAQ:NVDA). This helps to explain why AMD stock stalled out this summer. After all, a company can only be the darling of the market for so long.
But then, this presents an opportunity. Unlike many traders, I prefer to buy stocks when people aren’t talking about them. Besides, this isn’t an either/or scenario.
It’s perfectly fine to diversify your portfolio with shares of multiple AI chip makers. Why not invest in Nvidia, AMD and a handful of other competitors in this space? Let them battle it out, and you don’t have to pick a winner because you’re betting on all the horses in the race.
AMD Hasn’t Lost Its Drive to Compete
AMD is giving Nvidia a run for its money. Surely, it’s not just a coincidence that after AMD slashed the prices of some of its graphics cards, Nvidia followed suit with its own product-price cuts.
Recent data indicates AMD is slowly but surely gaining back market share from Nvidia in certain areas. Nvidia definitely needs to watch its back, as AMD’s Radeon RX 7700 XT and 7800 XT graphics processing units (GPUs) could give Nvidia a run for its money.
The point is, AMD isn’t just sitting around and letting Nvidia eat its lunch. I’m not suggesting that AMD will achieve parity with Nvidia in the tech-product industry tomorrow or next week.
Again, the idea here is to invest in the company that’s not on the front page in the financial press.
AMD Stock Could Awaken at Any Moment
AMD has an amazing first half of the year, but Nvidia came along and stole AMD’s thunder. This doesn’t mean you should completely ignore AMD, though.
Remember, the market is constantly in flux, favoring one company this month and then another company a few months later. AMD is still a relentless competitor and won’t just let Nvidia steal 100% of the market.
Therefore, I fully expect AMD stock to perk up in the second half of 2023. The best strategy now is to hedge your bets by owning a few shares of AMD, Nvidia and other high-quality chipmakers you’ve conducted your due diligence on.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
