Is Investing in Advanced Micro Devices (AMD) a Good Idea?
Investors are on the lookout for the “next Nvidia” in the stock market, and many believe that Advanced Micro Devices (AMD) may be just that. However, according to Northland Capital, rushing to buy these stocks may not be worthwhile. Analysts suggest that the artificial intelligence revolution may not be as significant as investors think.
In recent years, Nvidia’s stocks have risen by over 200%, while AMD’s stocks have increased by “only” 127%. This suggests that the majority of investors still consider Nvidia to be the leader in the artificial intelligence market. However, AMD is following the success of its competitors and gaining popularity.
Nevertheless, analysts at Northland Capital have a cautious advice for potential investors. In 2023, many companies panicked and accumulated an excess of high-performance chips that they didn’t actually need. This means that the pace of demand growth for AI chips may not be as rapid as investors expect. Purchasing these stocks may slow down or even reverse when companies work through their excess inventory.
Forecasts for the future of the AI chip market are varied. According to a report by TipRanks, Melius Research predicts that AMD’s data center revenues will reach a staggering $15.5 billion by 2025, compared to approximately $6 billion in 2023. On the other hand, Northland believes that AMD’s AI revenues may reach $16 billion by 2027.
Frequently Asked Questions:
Q: Which company is considered the leader in the artificial intelligence market?
A: The majority of investors consider Nvidia to be the leader in the artificial intelligence market.
Q: What were the changes in stock prices for Nvidia and AMD in recent years?
A: In recent years, Nvidia’s stocks have risen by over 200%, while AMD’s stocks have increased by 127%.
Q: What are the forecasts for AMD’s future data center revenues?
A: Melius Research predicts that AMD’s data center revenues will reach $15.5 billion by 2025, and Northland believes they may reach $16 billion by 2027.
Q: Is it worth selling AMD stocks?
A: Due to the high valuation and the increase in stock price, analysts recommend investors to take a pause and wait for further developments.
Definitions:
- Artificial intelligence (AI) – It is a field of computer science that focuses on creating computer systems capable of performing tasks that typically require human intelligence.
- Stocks – Shares in the ownership of a company that investors can purchase to participate in profits and have a say in company matters.
- Data centers – Large technical facilities that gather, store, and distribute data.
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The source of the article is from the blog meltyfan.es