Better AI Stock: AMD vs. Nvidia

Whether you’re a casual investor or trade professionally, you’re likely aware of the boom in artificial intelligence (AI) that kicked off last year. The launch of OpenAI’s ChatGPT reignited interest in the technology, leading countless tech companies to pivot their businesses toward the high-growth sector.

As a result, the AI market is projected to expand at a compound annual growth rate of 37% through 2030, which will see it hit just under $2 trillion. The industry is expanding at a rapid pace, making it one of the best places to make a long-term investment.

Two stocks currently leading the way in AI are Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), with their shares recently up 149% and 257% respectively year over year. As prominent chipmakers, these companies supply the hardware necessary to train and run AI models. Their stocks could soar further in the coming years as the market develops.

So, let’s compare these companies’ businesses and determine whether AMD or Nvidia is the better AI stock this March.

Advanced Micro Devices

AMD was slightly overshadowed by Nvidia’s head start in AI chips last year, as Nvidia seized an estimated 80% to 95% market share in AI graphics processing units (GPUs).

However, the massive potential of the industry suggests AMD won’t need to dethrone Nvidia to still see major gains from AI. So, despite spending years prioritizing its position in central processing units (CPUs), AMD has shifted its focus to developing its GPU technology and expanding in the budding AI market.

Last December, the company unveiled its MI300X AI GPU. The chip was designed to compete directly with Nvidia’s offerings and has already caught the attention of some of tech’s most prominent players.

In November 2023, Microsoft announced that Azure would become the first cloud platform to use AMD’s MI300X to optimize AI capabilities. Microsoft has a close partnership with ChatGPT developer OpenAI, making the company a powerful ally for AMD. An agreement…