Better Semiconductor Stock: Nvidia or Advanced Micro Devices

Motley Fool07-01

Nvidia and AMD have both seen strong growth in the data center segments.The data center is a much larger piece of total revenue for Nvidia, compared to AMD.The stocks trade at similar valuations ...

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lrjk1985
·07-01
Nvdia is better, no cap.
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href=https://www.fool.com/investing/2024/06/30/better-semiconductor-stock-nvidia-amd/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia and AMD have both seen strong growth in the data center segments.The data center is a much larger piece of total revenue for Nvidia, compared to AMD.The stocks trade at similar valuations ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/06/30/better-semiconductor-stock-nvidia-amd/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4543","symbol_name":"AI","start_time":0,"source_url":"https://www.fool.com/investing/2024/06/30/better-semiconductor-stock-nvidia-amd/","article_id":"2447752866","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2447752866","pubTimestamp":1719812950,"columns":[],"sourceInfo":{"source_id":"fool_stock","name":"Motley 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supremacy, two of the top companies battling it out are Nvidia and Advanced Micro Devices. Over the past five years, both stocks have been strong performers. AMD is up over 433% during that stretch, which is outstanding. However, that return pales in comparison to the over 3,000% gain in Nvidia's stock.Nvidia has been the better stock during the past five years, but which stock will likely outperform over the next five?Nvidia vs. AMDAt the moment, the buildout of artificial intelligence (AI) infrastructure benefits both companies, given the demand for the graphic processing units (GPUs) needed to power large language model (LLM) training and artificial intelligence (AI) inference. This insatiable demand for GPUs led Nvidia's data center segment to post $22.6 billion in fiscal 2025 Q1 revenue (for the quarter ending April 28, 2024), an incredible 427% year-over-year increase. AMD's data center segment, meanwhile, saw its fiscal 2024 first-quarter revenue soar more than 80% year over year to $2.3 billion.Nvidia has become the clear leader in the AI chip space, which can be seen with its data center segment generating nearly 10 times the amount of revenue that AMD's data center segment produced. The company's GPUs have become the primary ones used, due to its CUDA (Compute Unified Device Architecture) software platform, which developers have long been trained on to program the chips. This, in turn, has helped create a wide moat for the company's GPUs, giving it more than about 80% market share.However, the segment is still growing nicely for AMD as its GPUs become an alternative to Nvidia's chips, which are in tight supply. Enterprises often like to have multiple suppliers so they don't become dependent on just one.AMD is making some inroads. Last month, Microsoft announced that it would offer clusters of AMD's MI300X chips through its Azure cloud computing service as a Nvidia alternative. In addition, AMD recently said it has had serious inquiries about building an AI cluster with over 1 million GPUs. Given that AI training clusters are typically built with a few thousand GPUs, this would be a huge win for AMD if it ever came to fruition.While Nvidia's results are dominated by its GPU products and data center segment, the data center only accounted for 43% of AMD's total revenue, while it was 87% of Nvidia's revenue. At the same time, some of AMD's other segments struggled, which led to total year-over-year revenue growth in the quarter of only 2%, compared to 262% for Nvidia.Which stock is the better buy?Despite Nvidia's strong stock performance, the two stocks actually trade at nearly identical forward price-to-earnings (P/E) valuations. Nvidia trades at a forward P/E of 45.6, compared to AMD at 44.8.NVDA PE Ratio (Forward) data by YCharts.With the valuations so similar, the question of which is the better stock to own going forward should come down to which company will perform better operationally over the next few years.Working in AMD's favor is that its data center segment has a much smaller base, compared to Nvidia. As the smaller company, it has the opportunity to take market share away from Nvidia. If the company can become a viable second source of GPU chips, it should see a lot of continued growth in the segment.Meanwhile, looking five years out, the company's gaming segment, which has been a big drag, should see a huge improvement starting in 2027 or 2028. Microsoft is reportedly planning to launch its next-generation gaming console in 2028, while Sony is expected to launch its PlayStation 6 console in 2027 or 2028.Back in 2022, AMD revenue related to the Sony PlayStation 5 (PS5) was nearly $3.8 billion, representing 16% of its revenue. Console sales typically peak their third year after launch, and the PS5 was introduced in 2020.Working in Nvidia's favor is the moat it has created with its CUDA platform. Developers have already learned on its platform, and it takes time and training to work with other GPUs, which costs money. This should allow the company to keep its lead.Meanwhile, AMD has started rapidly pushing innovation by developing next-generation architecture GPU platforms that will be backward compatible with its existing architecture. This should help drive huge demand from customers looking to stay at the cutting edge of AI capabilities.If AI is still in its early innings and the data center buildout is just beginning, then Nvidia is my preferred stock to buy between the two chipmakers, given the moat it has created. However, I think AMD could also be a very solid investment, especially ahead of a gaming console refresh cycle in the next few years.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":322717472145464,"gmtCreate":1719819034541,"gmtModify":1719819038048,"author":{"id":"3582784322184490","authorId":"3582784322184490","name":"lrjk1985","avatar":"https://static.tigerbbs.com/fefb89309f2792d9fd2433431d3e68c2","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3582784322184490","authorIdStr":"3582784322184490"},"htmlText":"Nvdia is better, no cap.","listText":"Nvdia is better, no cap.","text":"Nvdia is better, no cap.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/322717472145464","repostId":2447752866,"repostType":2,"repost":{"id":"2447752866","kind":"highlight","pubTimestamp":1719812950,"share":"https://ttm.financial/m/news/2447752866?lang=&edition=fundamental","pubTime":"2024-07-01 13:49","market":"us","language":"en","title":"Better Semiconductor Stock: Nvidia or Advanced Micro Devices","url":"https://stock-news.laohu8.com/highlight/detail?id=2447752866","media":"Motley Fool","summary":"Which stock will be the better performer over the next five years?","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia and AMD have both seen strong growth in the data center segments.</p></li><li><p>The data center is a much larger piece of total revenue for Nvidia, compared to AMD.</p></li><li><p>The stocks trade at similar valuations despite Nvidia&#39;s superior revenue growth.</p></li></ul><p>In the battle for chip supremacy, two of the top companies battling it out are <a href=\"https://laohu8.com/S/NVDA\">Nvidia</a> and <a href=\"https://laohu8.com/S/AMD\">Advanced Micro Devices</a>. Over the past five years, both stocks have been strong performers. AMD is up over 433% during that stretch, which is outstanding. However, that return pales in comparison to the over 3,000% gain in Nvidia&#39;s stock.</p><p>Nvidia has been the better stock during the past five years, but which stock will likely outperform over the next five?</p><h2 id=\"id_3695142652\">Nvidia vs. AMD</h2><p>At the moment, the buildout of artificial intelligence (AI) infrastructure benefits both companies, given the demand for the graphic processing units (GPUs) needed to power large language model (LLM) training and artificial intelligence (AI) inference. This insatiable demand for GPUs led Nvidia&#39;s data center segment to post $22.6 billion in fiscal 2025 Q1 revenue (for the quarter ending April 28, 2024), an incredible 427% year-over-year increase. AMD&#39;s data center segment, meanwhile, saw its fiscal 2024 first-quarter revenue soar more than 80% year over year to $2.3 billion.</p><p>Nvidia has become the clear leader in the AI chip space, which can be seen with its data center segment generating nearly 10 times the amount of revenue that AMD&#39;s data center segment produced. The company&#39;s GPUs have become the primary ones used, due to its CUDA (Compute Unified Device Architecture) software platform, which developers have long been trained on to program the chips. This, in turn, has helped create a wide moat for the company&#39;s GPUs, giving it more than about 80% market share.</p><p>However, the segment is still growing nicely for AMD as its GPUs become an alternative to Nvidia&#39;s chips, which are in tight supply. Enterprises often like to have multiple suppliers so they don&#39;t become dependent on just one.</p><p>AMD is making some inroads. Last month, Microsoft announced that it would offer clusters of AMD&#39;s MI300X chips through its Azure cloud computing service as a Nvidia alternative. In addition, AMD recently said it has had serious inquiries about building an AI cluster with over 1 million GPUs. Given that AI training clusters are typically built with a few thousand GPUs, this would be a huge win for AMD if it ever came to fruition.</p><p>While Nvidia&#39;s results are dominated by its GPU products and data center segment, the data center only accounted for 43% of AMD&#39;s total revenue, while it was 87% of Nvidia&#39;s revenue. At the same time, some of AMD&#39;s other segments struggled, which led to total year-over-year revenue growth in the quarter of only 2%, compared to 262% for Nvidia.</p><h2 id=\"id_527809592\">Which stock is the better buy?</h2><p>Despite Nvidia&#39;s strong stock performance, the two stocks actually trade at nearly identical forward price-to-earnings (P/E) valuations. Nvidia trades at a forward P/E of 45.6, compared to AMD at 44.8.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9d04382deeaf88511a543723f8918910\" alt=\"NVDA PE Ratio (Forward) data by YCharts.\" title=\"NVDA PE Ratio (Forward) data by YCharts.\" tg-width=\"720\" tg-height=\"487\"/><span>NVDA PE Ratio (Forward) data by YCharts.</span></p><p>With the valuations so similar, the question of which is the better stock to own going forward should come down to which company will perform better operationally over the next few years.</p><p>Working in AMD&#39;s favor is that its data center segment has a much smaller base, compared to Nvidia. As the smaller company, it has the opportunity to take market share away from Nvidia. If the company can become a viable second source of GPU chips, it should see a lot of continued growth in the segment.</p><p>Meanwhile, looking five years out, the company&#39;s gaming segment, which has been a big drag, should see a huge improvement starting in 2027 or 2028. Microsoft is reportedly planning to launch its next-generation gaming console in 2028, while Sony is expected to launch its PlayStation 6 console in 2027 or 2028.</p><p>Back in 2022, AMD revenue related to the Sony PlayStation 5 (PS5) was nearly $3.8 billion, representing 16% of its revenue. Console sales typically peak their third year after launch, and the PS5 was introduced in 2020.</p><p>Working in Nvidia&#39;s favor is the moat it has created with its CUDA platform. Developers have already learned on its platform, and it takes time and training to work with other GPUs, which costs money. This should allow the company to keep its lead.</p><p>Meanwhile, AMD has started rapidly pushing innovation by developing next-generation architecture GPU platforms that will be backward compatible with its existing architecture. This should help drive huge demand from customers looking to stay at the cutting edge of AI capabilities.</p><p>If AI is still in its early innings and the data center buildout is just beginning, then Nvidia is my preferred stock to buy between the two chipmakers, given the moat it has created. However, I think AMD could also be a very solid investment, especially ahead of a gaming console refresh cycle in the next few years.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Better Semiconductor Stock: Nvidia or Advanced Micro Devices</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBetter Semiconductor Stock: Nvidia or Advanced Micro Devices\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-01 13:49 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/06/30/better-semiconductor-stock-nvidia-amd/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia and AMD have both seen strong growth in the data center segments.The data center is a much larger piece of total revenue for Nvidia, compared to AMD.The stocks trade at similar valuations ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/06/30/better-semiconductor-stock-nvidia-amd/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4543":"AI","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","LU1242518931.SGD":"Fullerton Lux Funds - Asia Absolute Alpha A Acc SGD","BK4588":"碎股","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","AMD":"美国超微公司","LU0979878070.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"A\" (USD) ACC","BK4503":"景林资产持仓","LU0097036916.USD":"贝莱德美国增长A2 USD","BK4551":"寇图资本持仓","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","NVDA":"英伟达","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","BK4097":"系统软件","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","BK4573":"虚拟现实","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","LU0149725797.USD":"汇丰美国股市经济规模基金","BK4581":"高盛持仓","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU1303367103.USD":"摩根大通多经理另类基金 A (acc)","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","BK4528":"SaaS概念","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU2458330243.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A-H1\" (SGDHDG) ACC","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","BK4554":"元宇宙及AR概念","LU0072462426.USD":"贝莱德全球配置 A2","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","LU0079474960.USD":"联博美国增长基金A","BK4585":"ETF&股票定投概念","BK4567":"ESG概念","LU0056508442.USD":"贝莱德世界科技基金A2","BK4576":"AR","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","BK4575":"芯片概念","BK4566":"资本集团"},"source_url":"https://www.fool.com/investing/2024/06/30/better-semiconductor-stock-nvidia-amd/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2447752866","content_text":"Nvidia and AMD have both seen strong growth in the data center segments.The data center is a much larger piece of total revenue for Nvidia, compared to AMD.The stocks trade at similar valuations despite Nvidia's superior revenue growth.In the battle for chip supremacy, two of the top companies battling it out are Nvidia and Advanced Micro Devices. Over the past five years, both stocks have been strong performers. AMD is up over 433% during that stretch, which is outstanding. However, that return pales in comparison to the over 3,000% gain in Nvidia's stock.Nvidia has been the better stock during the past five years, but which stock will likely outperform over the next five?Nvidia vs. AMDAt the moment, the buildout of artificial intelligence (AI) infrastructure benefits both companies, given the demand for the graphic processing units (GPUs) needed to power large language model (LLM) training and artificial intelligence (AI) inference. This insatiable demand for GPUs led Nvidia's data center segment to post $22.6 billion in fiscal 2025 Q1 revenue (for the quarter ending April 28, 2024), an incredible 427% year-over-year increase. AMD's data center segment, meanwhile, saw its fiscal 2024 first-quarter revenue soar more than 80% year over year to $2.3 billion.Nvidia has become the clear leader in the AI chip space, which can be seen with its data center segment generating nearly 10 times the amount of revenue that AMD's data center segment produced. The company's GPUs have become the primary ones used, due to its CUDA (Compute Unified Device Architecture) software platform, which developers have long been trained on to program the chips. This, in turn, has helped create a wide moat for the company's GPUs, giving it more than about 80% market share.However, the segment is still growing nicely for AMD as its GPUs become an alternative to Nvidia's chips, which are in tight supply. Enterprises often like to have multiple suppliers so they don't become dependent on just one.AMD is making some inroads. Last month, Microsoft announced that it would offer clusters of AMD's MI300X chips through its Azure cloud computing service as a Nvidia alternative. In addition, AMD recently said it has had serious inquiries about building an AI cluster with over 1 million GPUs. Given that AI training clusters are typically built with a few thousand GPUs, this would be a huge win for AMD if it ever came to fruition.While Nvidia's results are dominated by its GPU products and data center segment, the data center only accounted for 43% of AMD's total revenue, while it was 87% of Nvidia's revenue. At the same time, some of AMD's other segments struggled, which led to total year-over-year revenue growth in the quarter of only 2%, compared to 262% for Nvidia.Which stock is the better buy?Despite Nvidia's strong stock performance, the two stocks actually trade at nearly identical forward price-to-earnings (P/E) valuations. Nvidia trades at a forward P/E of 45.6, compared to AMD at 44.8.NVDA PE Ratio (Forward) data by YCharts.With the valuations so similar, the question of which is the better stock to own going forward should come down to which company will perform better operationally over the next few years.Working in AMD's favor is that its data center segment has a much smaller base, compared to Nvidia. As the smaller company, it has the opportunity to take market share away from Nvidia. If the company can become a viable second source of GPU chips, it should see a lot of continued growth in the segment.Meanwhile, looking five years out, the company's gaming segment, which has been a big drag, should see a huge improvement starting in 2027 or 2028. Microsoft is reportedly planning to launch its next-generation gaming console in 2028, while Sony is expected to launch its PlayStation 6 console in 2027 or 2028.Back in 2022, AMD revenue related to the Sony PlayStation 5 (PS5) was nearly $3.8 billion, representing 16% of its revenue. Console sales typically peak their third year after launch, and the PS5 was introduced in 2020.Working in Nvidia's favor is the moat it has created with its CUDA platform. Developers have already learned on its platform, and it takes time and training to work with other GPUs, which costs money. This should allow the company to keep its lead.Meanwhile, AMD has started rapidly pushing innovation by developing next-generation architecture GPU platforms that will be backward compatible with its existing architecture. This should help drive huge demand from customers looking to stay at the cutting edge of AI capabilities.If AI is still in its early innings and the data center buildout is just beginning, then Nvidia is my preferred stock to buy between the two chipmakers, given the moat it has created. However, I think AMD could also be a very solid investment, especially ahead of a gaming console refresh cycle in the next few years.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":9,"commentSize":1,"repostSize":1,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}