Advanced Micro Devices (NASDAQ:AMD) stock doesn’t grab as many headlines as Nvidia (NASDAQ:NVDA), but with an average price objective of $193.03, analysts grade AMD stock as a “Strong Buy,” suggesting a 27% potential.
AMD’s AI aspirations (including the MI300 AI chips and the MI300X chips) are garnering attraction. Thanks to a consumer-friendly, open strategy, AMD is aggressively vying with Nvidia and has an edge over it; its RX 7900 XTX provides comparable performance at a reduced price.
With seven out of the previous 12 quarters comfortably exceeding Wall Street predictions, AMD is likewise a reliable, consistent performer, proving the attractiveness of its AI and data center solutions.
It has repeatedly beat Wall Street projections with strong quarterly performance.
For individuals interested in chip-related investments, both Nvidia and AMD appeal. But AMD’s year-to-date performance lags behind Nvidia’s. Out of the two, AMD stock presents a better chance of outsized profits; hence, it belongs in any AI-oriented portfolio.
AMD’s Strategic Innovations in AI
AMD has been progressively displacing Intel (NASDAQ:INTC) from its market share in the artificial intelligence processor space.
As shown by partnerships on bespoke AI chips and integrations into Microsoft‘s (NASDAQ:MSFT) AI-powered products, partnerships with big businesses like Microsoft help strengthen AMD’s position.
To enhance its portfolio, AMD is releasing Zen 5 Ryzen 9000 CPUs, promising a 16% improvement in instructions per clock over the previous generation. In the Ryzen 9000 series, the Ryzen 9 9950X features 16 cores and 32 threads with a 5.7 GHz top frequency.
The MI300 AI chips, among AMD’s most recent processors, are gaining popularity in the AI and data center areas. These processors position AMD as a major rival to Nvidia by being built for sophisticated AI loads and big language models.
AMD leads HPC with EPYC CPUs and Instinct GPUs powering some of the fastest supercomputers. AMD dominates this industry with its growing position on the Top500 and Green500 rankings of efficient supercomputers.
Additionally, AMD introduced new CPU, NPU, and GPU architectures at Computex 2024, demonstrating their commitment to upgrading AI infrastructure from consumer PCs to data centers.
The new AMD Ryzen AI300 Series CPUs for laptops with advanced neural processing will alter AI computing.
With its EPYC CPUs and Instinct GPUs driving some of the fastest supercomputers worldwide, AMD keeps leading in the HPC sector. AMD’s position on the Top500 and Green500 lists of the most efficient supercomputers has grown, therefore highlighting its supremacy in this field.
AMD’s AI Chip Expansion Challenge Nvidia’s GPU Dominance
AMD has often exceeded Wall Street projections in recent quarters by showing constant good financial performance. Under CEO Lisa Su, the firm has strong leadership as she has effectively guided AMD over financial and competitive obstacles, thus rendering it a dependable investment.
AMD’s performance has been robust; recent quarterly numbers exceeded Wall Street projections. With sales of $5.47 billion and Q1 2024 EPS of 62 cents, the business announced.
Furthermore, expected to surpass $4 billion this year AMD’s AI chip sales, signifying strong demand and future expansion possibilities.
AMD’s stock has witnessed a notable increase – 345% in the last five years. The success of its new artificial intelligence microchips and strategic alliances helps AMD stock position itself for continuous expansion.
Nvidia continues to dominate the high-end GPU market with the RTX 4090, the best graphics card for gaming and professional use. However, AMD’s RX 7900 XTX is a good alternative for individuals who want outstanding performance at a lower price.
While Nvidia’s RTX 4070 is distinguished for its outstanding ray tracing capabilities and DLSS compatibility, AMD’s RX 7800 XT offers great value in the midrange sector, particularly in conventional rasterizing performance.
AMD Stock is a Strong Buy for the Future
Nvidia is what comes to mind when you think of AI stocks, especially considering its 164% rise over the last year. However, AMD stock need not be overshadowed by the hoopla.
On its own, AMD is a strong performer, especially since CEO Lisa Su took the helm. Under her guidance, products like the MI300 AI processors and Zen 5 Ryzen 9000 Series ensured AMD became super competitive, especially with respect to long-term rival Intel.
Nvidia does edge past AMD in certain important categories, but its triple-digit rally this year means AMD stock potentially holds more upside. Financial research expert Jim Reid of Deutsche Bank recently cautioned of “signs of over-exuberance” regarding Nvidia.
Although that doesn’t mean you need to part ways with your Nvidia investment, a little diversification doesn’t hurt, and AMD stock benefits from several of the themes sending Nvidia stock upward this year.
On the date of publication, Faizan Farooque 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) and positions in the securities mentioned in this article.
