AMD & Nvidia stocks hit a record high with the help of AI
With investors continuing to favor stocks of artificial intelligence chip manufacturing companies, $Advanced Micro Devices(AMD)$ and $NVIDIA Corp(NVDA)$ hit record highs on January 18th.
AMD's stock price rose more than 1% last Thursday's trading to a record closing price of $162.67, while Nvidia rose nearly 2% to $571.07.
Following explosive growth in 2023, both companies achieved double-digit percentage gains early this year, with AMD's stock price soaring 127.6% and Nvidia's stock price surging 238.8%.
The record valuations reflect investors' continued interest and desire in companies that design and sell AI graphics processors. GPUs were initially designed for playing computer games. But GPUs are also crucial for training and deploying complex AI models like OpenAI's GPT, leading to a significant increase in chip sales.
Over the past two years, Nvidia has been the primary GPU supplier for AI companies and was the best-performing stock in the $S&P 500(.SPX)$ last year. Meanwhile, investors are increasingly bullish on AMD, the second-largest independent GPU manufacturer. The company announced the launch of a new chip last year that can compete with Nvidia's AI chip H100.
Analysts also believe that AMD is improving its AI software, eliminating one of the main reasons why Nvidia chips are preferred over AMD chips.
On Thursday, $Taiwan Semiconductor Manufacturing(TSM)$ , which produces chips for Nvidia and AMD, reported better-than-expected sales. C.C. Wei, chief executive officer, said that there is strong demand for AI chips using the most advanced manufacturing technology.
Goldman Sachs analysts led by Toshiya Hari wrote in a report that TSMC management believes manufacturing AI chips could account for a "high single-digit" percentage of its revenue within five years, which has positive implications for both Nvidia and AMD.
Separately, Mark Zuckerberg, CEO of $Meta Platforms, Inc.(META)$ , the largest buyer of GPUs, announced plans on Thursday to purchase billions of dollars worth of GPUs from Nvidia and other companies this year.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Wow