{"id":132886,"date":"2025-09-10T04:15:13","date_gmt":"2025-09-10T04:15:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/132886\/"},"modified":"2025-09-10T04:15:13","modified_gmt":"2025-09-10T04:15:13","slug":"nvidia-or-amd-heres-the-ai-chip-stock-this-investor-is-betting-on","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/132886\/","title":{"rendered":"Nvidia or AMD: Here\u2019s the AI Chip Stock This Investor Is Betting On"},"content":{"rendered":"

AI<\/a> advances can sometimes feel like it\u2019s racing ahead of imagination, achieving feats that would have seemed out of reach only a few years ago. Yet, for all the ambition, this technology still runs up against hard realities, starting with the physical AI chips on which all this magic depends.<\/p>\n

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There are only a handful of chip companies worldwide with the experience, knowledge, and resources to build this complex infrastructure of the future. Their products and services have been in high demand in recent years as businesses move quickly to harness the potential of this exciting technology.<\/p>\n

And this demand is expected to remain strong. According to a recent report by Markets and Markets, the market for AI chips is projected to expand at a CAGR of 20.4% over the next five years \u2013 increasing from $166.9 billion in 2025 to $311.58 billion in 2029.<\/p>\n

While that certainly makes for an intriguing investment background, not all AI chip companies are created equal. Investor Bashar Issa looked into both Nvidia (NASDAQ:NVDA<\/a>) and Advanced Micro Devices (NASDAQ:AMD<\/a>) to better understand which of these offers the best opportunity to secure long-term value. Let\u2019s see what he uncovered.<\/p>\n

Nvidia<\/p>\n

Undisputed data center top dog Nvidia has become almost synonymous with advanced AI chips. The company\u2019s ability to deliver incredible technological value has become sacrosanct, and CEO Jensen Huang has achieved near rockstar status in the tech world.<\/p>\n

The company has staked a claim to some 90% of the data center market, a concrete demonstration of Nvidia\u2019s unmistakable domination of this growing field. Nvidia\u2019s earnings reports are must-see viewing, as they provide the yardstick upon which the health of the industry writ large is measured.<\/p>\n

That was true again in Fiscal Q2 2026, when Nvidia reported record sales of $46.7 billion \u2013 up 56% year-over-year \u2013 and margins back in the 70% range after a temporary China-related write-off. Yet, despite these blockbuster numbers, the stock slipped after the release, as expectations for even bigger gains went unmet.<\/p>\n

The letdown was particularly sharp in the data center segment, where revenues of $41.1 billion fell just shy of forecasts. Add in lingering concerns over China sales, and some investors turned cautious.<\/p>\n

But not everyone sees reason for worry. Bashar Issa urges investors to view the pullback as a chance to buy into Nvidia\u2019s long-term growth story. <\/p>\n

\u201cAI infrastructure demand is still in its infancy,\u201d Issa argues, calling the current weakness a classic \u201cbuy-the-dip opportunity.\u201d<\/p>\n

The investor points to the hyperscalers \u2013 with the exception of Microsoft \u2013 accelerating AI capex at a blistering pace. Alphabet has boosted spending by $30 billion this year to reach $85 billion, and Amazon raised its budget from $83 billion to $100 billion.<\/p>\n

That flood of spending reflects a demand backdrop that far outstrips supply. More importantly, it\u2019s being fueled by highly profitable cloud businesses, with AWS and Google Cloud posting Q2 2025 operating margins of 33% and 20.7%, respectively. These economics give the hyperscalers every incentive to keep pressing forward.<\/p>\n

And as Issa emphasizes, none of these players can afford to be seen slowing down on AI innovation. <\/p>\n

\u201cOur conclusion is that there is a financial and strategic incentive for cloud providers to continue their AI spending initiatives, creating a tailwind for Nvidia\u2019s share price,\u201d the investor says, assigning NVDA a Strong Buy rating. (To watch Bashar Issa\u2019s track record, click here<\/a>)<\/p>\n

Wall Street is broadly in agreement. With 35 Buys, 3 Holds, and just 1 Sell, the stock enjoys a Strong Buy consensus. The 12-month average price target of $210.73 suggests upside of more than 25% from current levels. (See NVDA stock forecast<\/a>)<\/p>\n

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Advanced Micro Devices<\/p>\n

Those hoping to see AMD enjoy the same kind of breakout that Nvidia has delivered were in for a disappointment. While Nvidia\u2019s share price exploded by 1,070% over the last three years, AMD\u2019s gains amounted to a more modest 80% in that same period.<\/p>\n

And even that growth wasn\u2019t steady. The stock endured a bruising stretch last year, losing half its value between March 2024 and early April. The irony for investors was that AMD wasn\u2019t exactly faltering on the fundamentals. It continued to post consistent revenue growth, apart from the usual seasonal dip in Q1, but the company struggled to step out from Nvidia\u2019s enormous shadow.<\/p>\n

Lately, though, AMD has been staging a comeback. Shares have nearly doubled in just a few months, fueled by record Q2 2025 revenues of $7.7 billion, a $10 billion deal with Saudi Arabia\u2019s HUMAIN, and optimism surrounding its MI350 and MI400 GPU families. The hope is that these chips might finally chip away at Nvidia\u2019s dominance in the inference market.<\/p>\n

That optimism, however, isn\u2019t universally shared. Issa, for one, is skeptical.<\/p>\n

\u201cClaims that AMD will dominate AI inference are unsupported; Nvidia already leads both training and inference markets, leaving AMD with little share,\u201d the investor argues.<\/p>\n

Issa points to the sheer disparity in scale. AMD\u2019s data center revenue hit $3.2 billion in Q2 2025, growing 14% year-over-year. Nvidia\u2019s comparable figure was $41.1 billion \u2013 thirteen times larger.<\/p>\n

\u201cLet that sink in. AMD added $410 million to its data center revenue, while Nvidia added ~$15 billion,\u201d Issa emphasizes.<\/p>\n

And with AMD trading at a Forward P\/E of 41.5x \u2013 higher than many faster-growing software peers, including Nvidia \u2013 the valuation picture, according to Issa, looks stretched.<\/p>\n

In other words, steer clear of AMD, which earns a Sell rating from Issa.<\/p>\n

Wall Street, however, isn\u2019t as ready to jump ship. With 26 Buys and 11 Holds, AMD carries a Moderate Buy consensus rating. Its 12-month average price target of $184.26 suggests an upside of ~19% from current levels. (See AMD stock forecast<\/a>)<\/p>\n

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To find good ideas for stocks trading at attractive valuations, visit TipRanks\u2019 Best Stocks to Buy<\/a>, a tool that unites all of TipRanks\u2019 equity insights.<\/p>\n

Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.<\/p>\n

Disclaimer & Disclosure<\/a>Report an Issue<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"AI advances can sometimes feel like it\u2019s racing ahead of imagination, achieving feats that would have seemed out…\n","protected":false},"author":2,"featured_media":132887,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,49,48,61],"class_list":["post-132886","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/132886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=132886"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/132886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/132887"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=132886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=132886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=132886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}