While Nvidia (NASDAQ:NVDA) currently holds a central position in the realm of chip manufacturing crucial for the AI revolution, there are other companies with significant potential to also drive innovation in this rapidly expanding field.
One such contender is Advanced Micro Devices (NASDAQ:AMD), which is aggressively investing in developing competitive chips to challenge Nvidia’s latest offerings.
Zvi Bar, a 5-star investor ranked in the top 2% of TipRanks’ stock experts, highlights AMD’s historical journey from trailing behind Intel in traditional PC chips to overtaking them. Now, AMD is not only a significant player in PC chips but also emerging as a strong competitor in the AI chip race.
“My expectation is that the market will come to accept that AMD is one of few companies that possess true chip wizardry that shall make it a necessary competitor and component of the economic and technological future,” Bar opined.
AMD holds certain advantages over Nvidia. According to industry magazine Tom’s Hardware, AMD’s flagship AI GPU, the Mi300x, costs between $10,000 and $15,000 per unit, whereas Nvidia’s H100 can exceed $40,000. While Nvidia maintains a strong market position due to its CUDA software advantage, AMD may appeal to smaller customers unable to afford Nvidia’s higher prices or seeking to diversify hardware suppliers.
AMD is also well-situated to take advantage of the rising demand for cryptocurrency. “AMD chips are highly competitive for cryptocurrency mining, with its most recent version of the Ryzen 9 often being one of the best performing choices for solving the related algorithms,” Bar explained.
From an investor perspective, acknowledging that the stock has underperformed since reaching a peak in March, Bar believes that AMD’s scheduled earnings release in just over a month could be a trigger for share prices to climb higher once more.
“I believe AMD now has the potential to be at support and (pardon the pun) spring from its present trading range to new highs in the second half of 2024,” Bar summed up.
Against this backdrop, Bar rates AMD shares a Buy. (To watch Bar’s track record, click here)
And he’s not alone – Wall Street analysts are mostly onboard too, with 28 Buy recommendations and 7 Holds, giving AMD a Strong Buy consensus rating. Their 12-month price target of $191.03 suggests a 19% upside from current levels. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
