NVDA - What Second Place Means For AMD
2024-07-02 15:32:50 ET
Summary
- Advanced Micro Devices, Inc. saw slight growth in Q1 revenues, mainly in its Data Center segment.
- Their advantage is in lower-cost servers that AMD chips provide over Nvidia products, as well as on the CPU side.
- The company has lessened its buybacks as share price increased, yet stock-based compensation increases.
- Long-term returns will depend on returns provided by their growing segments, cyclical segments, and the impact of stock-based compensation and buybacks.
It's been about a year since the craze of generative AI took off, triggering a spike in the share price of semiconductor companies, whose GPUs naturally feed into that market. The most prominent of the two have been Advanced Micro Devices, Inc. ( AMD ) and NVIDIA Corporation ( NVDA ), the former being my focus today. While both stocks initially took off, the first half of 2024 hasn't been as favorable to AMD.
AMD vs. NVDA 6M Total Returns (Seeking Alpha)
Of course, this doesn't necessarily say anything about fundamentals. It could just reflect market sentiment. That said, the conventional wisdom seems to be that while Nvidia and AMD are both better chipmakers than Intel Corporation ( INTC ), Nvidia still beats AMD....
What Second Place Means For AMD