Artificial Intelligence has taken the world by storm on changing how things work and how people interact. Its growing use and popularity has also taken equity markets to heights never seen before. If there was any doubt of the technology potential, look no further than Nvidia, a stock that has exploded by over 300% over the past year, having emerged as the poster child of the game-changing technology.
AMD VS Nvidia
While AI is expected to be a primary needle mover in the equity markets, there will always be alternatives to Nvidia for investors eyeing exposure to the revolutionary technology. As technology remains a top priority for businesses while fuelling innovations in various sectors, there will always be attractive investment opportunities.
Advanced Micro Devices is one company that has carved a niche as a Nvidia alternative for investors eyeing exposure in the burgeoning AI landscape. While the focus has been on Nvidia’s powerful graphics processing unit, given its growing demand for use in enabling various AI innovations, AMD is also capturing attention with its advanced semiconductors that are used to train large language models.
AMD has benefited from the AI buzz thanks to its latest AI-focused offering, the M1300X chip, already eliciting interest from some big companies. The chip edge in training large language models has attracted strong interest from Microsoft and Meta Platforms.
Consequently, the M1300X is a masterstroke that could allow Advanced Micro Devices to secure a key foothold in the AI accelerator market. The fact that the chip sells for between $10,000 and $15000 has made it a preferred option for Nvidia’s H100, which costs $40,000. With the market for AI chips expected to be worth $400 billion by 2027, AMD remains well-positioned to take advantage of the growth and generate significant value.
AMD AI Powered PCs Opportunity
Advanced Micro Devices is not banking solely on taking Nvidia to the GPU marketplace. The company has also set out to grow its prospects in the AI-powered PC landscape, a sector expected to experience significant growth in the future. Research firm IDC indicates that PC shipments will double this year as demand for powerful and faster PCs powered by AI chips grows.
The company already has an edge on this front, having been developing and selling PC chips. While it has played second fiddle to Intel, it has ramped up its investments into developing AI-capable chips to strengthen its competitive edge on AI-powered PCs.
While Advanced Micro Devices has a long way to go in replacing Nvidia or the other six magnificent stocks, it still offers a high-risk reward opportunity. The company has been growing in strength through innovation, with its revenue and earnings growing by double digits last year. Its fourth-quarter revenue was up 10% to $6 billion as the focused data center segment posted 38% revenue growth.
Advanced Micro Device is a solid bet as it develops all the necessary hardware to train and run AI models. The fact that the company boasts of the second-largest market share in GPUs behind Nvidia and a significant share in AI-powered PCs affirms its long-term prospects.
