What’s the best chip stock that’s not Nvidia (NVDA) for investors right now?
Seeking Alpha analysts Tangerine Tan Capital and The Techie weigh in.
Tangerine Tan Capital: I think Taiwan Semiconductor Manufacturing Company (TSM) is the best chip stock at the moment because the company dominates the market for advanced chip manufacturing. Ultimately, it doesn’t matter if Alphabet (GOOG) with its Ironwood TPUs, Broadcom (AVGO) with its custom ASICs, or Nvidia Corporation (NVDA) and Advanced Micro Devices (AMD) with their flagship products prevail. All of them must use TSM for manufacturing because no other company in the world can currently reach TSM’s level of quality. Intel Corporation (INTC) and Samsung Electronics (OTCPK:SSNLF) are years behind. So TSM and ASML Holding N.V (ASML) are probably the only true “pick-and-shovel plays” on the AI market. And, with a forward PEG ratio of ~1, TSM (TSM) is fairly valued as well.
The Techie: I expect Advanced Micro Devices (AMD) to have more fuel in the tank and kinder market expectations to outperform vis-à-vis AI. I see a more solid growth story from AMD next year with the deployment of 1GW in the OpenAI (OPENAI) deal. I also believe the market is sleeping on the CPU side of its business against Intel (INTC) and its potential with more rackable solutions. AMD is positioned to pocket any diversification of compute demand, especially with the MI450 series. So, all in all, AMD (AMD) is looking more like a winner than Nvidia (NVDA) a year out.