Should You Forget Nvidia and Buy This Tech Stock Instead?

In the rapidly evolving world of artificial intelligence (AI) and data center technologies, investors are constantly on the lookout for promising stocks that can deliver significant returns. One name that has been gaining traction in recent months is Advanced Micro Devices (AMD), a semiconductor company that offers a compelling alternative to market leader Nvidia. But should you forget Nvidia and buy AMD instead? Let's delve into the data and expert opinions to help you make an informed decision.

AMD's affordable AI approach

One of the key factors driving AMD's recent growth and outperformance in the AI hardware market is its affordable AI approach. The company's Instinct MI300 AI chips and upcoming Instinct MI350 and MI400 series have attracted large-scale customers seeking high-performance AI accelerators at a lower cost than Nvidia's offerings. This has led to a significant increase in AMD's data center revenues, with GPU sales projected to reach over $5 billion in 2024, up from an initial target of $3.5 billion.

AMD's strategic partnership with Liquid AI, a generative AI startup, has further solidified its position in the AI market. The partnership, along with a $250 million funding round led by AMD, will help Liquid AI optimize its LFMs with AMD's graphic, central, and neural processing units, driving further growth and innovation in the AI hardware sector.

AMD vs. Nvidia: Performance, cost, and market potential

When comparing AMD's affordable AI approach to Nvidia's, it's essential to consider performance, cost, and market potential. While Nvidia's AI accelerator chips have been successful, AMD's Instinct MI300 and upcoming MI350 and MI400 series are gaining traction in the AI market. AMD's data center revenues are surging, with GPU sales expected to reach over $5 billion in 2024, up from an initial projection of $3.5 billion. Despite Nvidia's dominance, AMD's lower stock price and valuation make it a compelling investment opportunity in the AI hardware sector.



Expert opinions and market data

Several experts and market data points support the notion that AMD is a strong alternative to Nvidia in the AI and data center sectors. Francisco Bido, senior vice president and senior portfolio manager at F/M Investments, highlights information technology and retail as top sectors for 2025, with AMD being a promising investment opportunity within the tech sector. Additionally, the Motley Fool recommends AMD as a buy, with 44 analyst opinions supporting this recommendation.



Conclusion

In conclusion, Advanced Micro Devices (AMD) presents a compelling alternative to Nvidia in the AI and data center sectors. Its affordable AI approach, strategic partnerships, and strong performance data make it an attractive investment opportunity for those looking to capitalize on the growing AI market. While Nvidia remains a dominant player, AMD's lower valuation and competitive pricing make it a worthy contender in the AI hardware space. As always, it's essential to conduct thorough research and consider your investment goals and risk tolerance before making any decisions.