Nvidia (NASDAQ:NVDA) has undeniably positioned itself as one of the biggest beneficiaries of the AI revolution, leaving other chipmakers like Advanced Micro Devices (NASDAQ:AMD) trailing behind.
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That could change, writes top investor, known by the pseudonym Nexus Research, who believes a golden opportunity has presented itself for AMD.
“As the AI revolution evolves from data centers to edge device computing, AMD finally has an opportunity to come out of Nvidia’s shadow,” writes the 5-star investor, who sits in the top 3% of all TipRanks’ stock pros.
Nexus Research explains that while data centers have been the foundation of AI growth, a transition towards AI applications in smartphones and laptops is on the horizon. Recent developments, such as the launch of Apple Intelligence and Microsoft’s AI PCs, have sparked discussions about the potential for hardware upgrade cycles in this space.
This shift would put a spotlight on the importance of AI accelerators within consumer devices. Nexus Research highlights an industry report projecting that AI PCs will rise from 20% of the market in 2024 to over 60% by 2028.
“If this projection actually materializes, whereby the demand for higher-performance AI PCs outpaces the demand for lower-performance devices, it would be great news for AMD,” argues Nexus Research, noting that AMD’s Ryzen AI 300 and Ryzen AI PRO 300 series outperform competitors like Intel and Qualcomm in terms of Trillions of Operations Per Second (TOPS).
Despite these positive developments, AMD’s valuation has yet to soar. Nexus Research points out that its Forward Price-to-Earnings Growth ratio remains the lowest among major AI players.
Believing that “AMD stock still remains attractively valued,” Nexus Research rates AMD shares a Buy. (To watch Nexus Research’s track record, click here)
Wall Street analysts share this optimism, with the heavily covered stock boasting 25 Buy and 6 Hold ratings, making AMD a consensus Strong Buy. The stock’s 12-month average price target of $188.96 implies potential gains of ~21% in the year ahead. (See AMD stock forecast)
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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.
