AMD’s Latest GPUs Should Scare Nvidia

Summary:

  • AMD’s turnaround story includes hiring Jim Keller, switching to TSMC, and capitalizing on Intel’s missteps, leading to a significant market position.
  • AMD’s new GPUs are competitive with Nvidia’s upcoming Blackwell, potentially impacting Nvidia’s margins while boosting AMD’s performance.
  • The primary risk is AMD’s lofty valuation and the potential for customers to develop their own CPUs/GPUs, affecting long-term AI demand.
  • Despite risks, AMD’s market cap is still less than 10% of Nvidia’s, presenting a lower risk profile for investors.
AMD headquarters in Santa Clara, California, USA

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There was a time, less than a decade ago, where AMD (NASDAQ:AMD) was flirting with whether it would be around anymore as its share price dropped below $2/share. Then the company hired legendary chip designer Jim Keller, switched to TSMC for fabrication, benefited


Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We are net short Nvidia.

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