NVIDIA VS AMD: Which Stock Is Better For Your Portfolio
The semiconductor industry is one of the most dynamic and competitive sectors in the technology world and two of the leading players are NVIDIA (NASDAQ: NVDA) and AMD (NASDAQ: AMD). Both companies produce graphics processing units (GPUs) and central processing units (CPUs) for various applications, such as gaming, data centres, artificial intelligence, and cloud computing.
However, they also have different strengths, weaknesses, opportunities, and threats that affect their stock performance and outlook. In this article, we will compare NVIDIA and AMD based on their financial results, market share, growth drivers, valuation, and analyst ratings, and try to determine which stock is a better investment for your portfolio.
NVIDIA VS AMD: Financial Performance
NVIDIA and AMD have both delivered impressive financial results in the past year, driven by strong demand for their products and the digital transformation trends.
Nvidia (NASDAQ: NVDA) showed a remarkable market performance, making it investors favourite. NVDA became the main attraction for investors as the leading enabler of the AI craze, successfully shifting its focus from GPU video gaming to data centre solutions for Big Tech.
NVDA reported revenue of $18.12 Billion with a net income of 9.24 Billion and the net margin was 51.01% in the Q3 2023 report which shows the robust performance of the company is based on the AI hype.
AMD is not giving up on the GPU battle with Nvidia. The company has launched its Ryzen 8000 Zen 5 processors and 8000G with integrated NPU (Neural Processing Unit), as announced in its Q4 ‘23 earnings call. The company aims to “accelerate AI” in the data centre market with its MI300 lineup.
The Instinct MI300X and the MI300A will compete directly with Nvidia’s H100 and H200 for AI training and generative AI.
AMD reported revenue of 6.17 Billion with a net income of 667.00 Million and a net margin of 10.81% showing remarkable financial growth.
Based on these results, NVDA has a clear edge over AMD regarding revenue, net income, and other factors. However, AMD has also shown impressive growth and profitability and has narrowed the gap with NVIDIA in some segments.
NVIDIA VS AMD: Market Share
Nvidia has achieved a record-breaking data centre revenue of $14.51 billion in Q3 FY24 (delivered in November 2023), up 279% year-over-year.
According to IoT Analytics, NVDA dominates the data centre GPU segment with a 92% market share, while AMD’s share is only 3%.
Nvidia also announced that it shipped up to 2 million H100 chips in 2024, more than triple the amount in 2023. This is on top of Nvidia’s 80.2% market share in the discrete desktop GPU market, as reported by Jon Peddie Research in Q2 2023.
On the other hand, AMD’s data centre revenue was up 38% year-over-year in Q4 2023. For the fiscal year 2023, this is only a 7% YoY growth of $6.5 billion. However, AMD’s competitive pricing in the desktop segment led to a 62% YoY revenue increase, thanks to the popularity of its affordable Ryzen CPUs.
For the industrial sector and embedded solutions such as healthcare, telecommunications, and data centres, AMD’s revenue was down 24% from the year-ago quarter. AMD’s acquisition of Xilinx helped the company boost the embedded segment revenue by 17% to $5.3 billion for the full year.
NVIDIA VS AMD: Stock Performance
Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD) both gave a remarkable performance in the past year as the Nvidia stock gave a spectacular return of 211.08 over the year while AMD gave a remarkable return of 97.19%. In the previous 3 months, NVDA gave 46.61% and AMD gave 48.10% returns as per the trading view.
The data shows that AMD giving tough competition to NVDA stock and both are heading upward on the daily technical chart showing the buying interest for both stocks.
Analyst Ratings
NVIDIA and AMD both have positive analyst ratings, indicating that the majority of analysts are bullish on their stocks. However, NVIDIA has more analyst coverage.
As per the data of Tradingview 46 analysts gave 1-year price forecast for the NVIDIA Corporation the maximum estimation is $1100 with 57.95% growth from the current price and the minimum estimate is $687.70 which is 41.13% down from the current price.
Moreover, 42 analysts gave a 1-year price forecast for Advanced Micro Devices Inc in which the max target is $270.00 and the minimum target is $135.00.
Conclusion
NVIDIA and AMD are both leading semiconductor companies that have delivered impressive financial results, market share gains, and stock performance in the past year. However, they also face different challenges and opportunities in the fast-growing and competitive markets of gaming, data centres, artificial intelligence, and cloud computing.
Based on their financial results, market share, growth drivers, valuation, and analyst ratings, NVIDIA seems to have a slight edge over AMD. However, AMD is also a strong contender that could surprise the market with its innovative products and competitive pricing.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Please conduct your own research before making any investment decisions.
