Nvidia’s NVDA impressive run alongside AMD’s AMD in the stock market recently hit some bumps, but corrections are like hitting a speed bump on a fast highway.
Investors are now contemplating whether it’s the right time to capitalize on the dip in these chip giants as the demand for semiconductor development for artificial intelligence continues to soar.
The AI Chip Dance
Nvidia made a grand entrance on Monday with a new chip design, introducing the Blackwell family of chips, dubbed the most potent artificial intelligence transistors on the market.
Meanwhile, AMD is flexing its muscles in the AI game with the MI300 series chips. Their MI300X chips pushed the firm to grab market share by locking horns with Nvidia’s fan-favorite H100 series, famed for training large language models like OpenAI’s chatbot GPT.
Yet, Nvidia raised the bar by upgrading its AI computing platform with the latest H200 and GH200 “super chip,” asserting its position as the market leader even before the Blackwell series announcement.
Market Landscape
Currently, Nvidia and AMD command the semiconductor AI chip realm, with Intel INTC trailing behind. Analysts value the AI chip market at over $60 billion, with a projected Compound Annual Growth Rate exceeding 30% in the upcoming years.
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Recent Trends & Performance Metrics
At the moment, Nvidia shares hover around $900, a tad below its $974 peak reached earlier this month. The stock surged over 250% from its $251.30 low experienced last March.
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AMD’s stock trades at approximately $182 and has seen a 25% dip from its $227.30 high a few weeks back. Nevertheless, the stock skyrocketed over 125% from its $81.02 low registered last May.
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Year-to-date, Nvidia’s shares surged by +80%, overshadowing AMD’s +23% growth and Intel’s -16% decline, proving they’re in a league of their own.
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Growth Predictions
Looking ahead, Nvidia’s sales are forecasted to shoot up by 70% in FY25 to $103.49 billion and rise by another 15% in FY26. Earnings are on a similar trajectory, with a predicted 81% increase in FY25 to $23.49 per share against $12.96 in FY24, and a further 11% bump to $26.06 per share in FY26.
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Turning to AMD, revenue is anticipated to grow by 11% in FY24 and further expand by 22% in FY25 to reach $30.97 billion. Earnings are expected to leap by 30% this year and skyrocket by 46% in FY25 to $5.05 per share.
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Deciding The Winner
Competition fuels innovation, and in the realm of AI chip technology, Nvidia remains at the forefront. Cementing its superiority with the Blackwell series, Nvidia holds a Zacks Rank #1 (Strong Buy) while AMD settles for a Zacks Rank #3 (Hold).
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The author’s opinions expressed herein do not necessarily mirror those of Nasdaq, Inc.
