Nvidia vs. AMD Stock: Which Is a Better Investment?

04/05/2024

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The surge of artificial intelligence has buoyed markets with some stocks taking a very strong lead.

Indeed, the global AI market size was estimated at a shocking $196.63 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 36.6% from 2024 to 2030, according to Grand View Research.

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Nvidia, of course, “the most important stock on the planet” delivered record-breaking earnings on February 21, with revenue rising to an eye-popping $22.1 billion — up 265% from a year ago according to the earnings report, thanks to its AI business. This is what some analysts, such as Wedbush Securities’ Dan Ives, said is “the biggest moment for the market and tech sector in many years” and a “game changing moment for the tech bulls.”

Other stocks have also been faring very well, such as Advanced Micro Devices (AMD)- which reported first quarter earnings on April 30. The company announced revenue of $5.5 billion for the quarter — above analysts’ expectations, according to the earnings report.

Here is how both stocks compare.

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Nvidia (as of May 3)

Stock price: $858.17
Year-to-date: 78.16%
Past year: 208.67%
Past month: -3.54%

CFRA Research has Buy opinion on the stock, citing its optimism surrounding NVDA’s pipeline and unprecedented demand for cloud infrastructure spend in favor of NVDA’s offerings.

“Greater software capabilities across the data center stack and NVDA’s plan to accelerate the cadence of new chip designs will support its massive competitive moat,” CFRA equity analyst Angelo Zino wrote in an April 2 note.

Nvidia is set to release its next earnings on May 22.

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AMD (as of May 3)

Stock price: $146.16
Year-to-date: 5.47%
Past year: 79.97%
Past month: -19.15%

AMD’s earnings were above analysts’ expectations, however, as The Motley Fool reported, performance was below expectations, which triggered some concern as to how much AI would drive the company’s future.

The Motley Fool further explained that AMD is still “significantly behind” Nvidia in the market for data center graphics-processing units.

“And its relatively slow growth momentum is causing some investors to sell out of the stock today,” it added.

Yet, as Investor Place explained, analysts are optimistic about AMD’s stock. Indeed, of the 48 analysts covering AMD, 37 have a “Buy” or “Strong Buy” rating, it explained.

For instance, CFRA Research has a Buy rating on the stock, citing its growth outlook for the company’s CPU data center servers from the ramp of its next-generation EPYC processor, prospects for GPU offerings and balance sheet improvement, according to a May 1 research note.

Zino also said that he sees sales rebounding 13% in 2024 and 28% in 2025.

Nvidia (as of May 3)

AMD (as of May 3)

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