Key Points
Nvidia (NASDAQ: NVDA) has significantly outperformed its competitor Advanced Micro Devices (NASDAQ: AMD) in the AI computing sector, with Nvidia’s stock soaring 1,120% since the start of 2023, compared to AMD’s 242% increase. In the most recent quarter, Nvidia generated $68.2 billion in revenue, a 73% year-over-year increase, while its data center division, crucial for AI, contributed $62.3 billion. In contrast, AMD reported $10.3 billion in total revenue, a 34% year-over-year increase, with its data center division contributing $5.4 billion, up 39% year-over-year.
Nvidia’s data center business is over ten times larger than AMD’s, highlighting its dominance in the GPT market. While AMD has ambitions to increase its data center revenues at 60% CAGR over the next five years, its growth prospects currently lag behind Nvidia’s established market position and rapid expansion.
Despite Nvidia’s stronger performance, AMD’s stock trades at a 50% premium compared to Nvidia’s, raising questions about valuation. Analysts suggest that Nvidia remains a more attractive investment option, given its substantial growth and lower relative stock price.
