Advanced Micro Devices Inc (NASDAQ:AMD) has closely followed Nvidia Corp’s (NASDAQ:NVDA) rapid rise, driven by the excitement surrounding artificial intelligence (AI).
However, the enthusiasm for AMD’s potential in the AI market might be overestimated, casting doubt on its recent stock gains.
Wall Street projects AMD to grow slower than Nvidia, whose chips remain the preferred choice for AI applications.
Additionally, AMD’s stock appears more costly, leading some investors like Thomas Hayes of Great Hill Capital to express concerns over the company’s valuation in the short term, particularly given its declining free cash flow and expanding multiples, Bloomberg reports.
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Despite these challenges, AMD’s stock has surged 116% since late October, compared to ...