Advanced Micro Devices (AMD) and Microsoft are emerging as key players in the rapidly expanding artificial intelligence (AI) market. As the industry grows at a compound annual growth rate of 37%, reaching a value of over $1 trillion by 2030, companies are restructuring their businesses to seize investment opportunities in this booming sector.
AMD, known for its advanced technology and decisive leadership, has steadily carved out a lucrative position in the chip market. Under the leadership of CEO Lisa Su, the company’s shares have soared over 4,000% in the past few years. AMD’s CPU market share has risen from 18% in 2017 to 35% in 2023, challenging Intel’s dominance. Additionally, the company has gained a significant share of the desktop GPU market, second only to Nvidia. With the introduction of its new AI chip, the MI300X GPU, AMD is set to disrupt Nvidia’s offerings and secure a powerful role in the AI sector.
On the other hand, Microsoft has been investing heavily in AI software. The company’s partnership with OpenAI, in which it holds a 49% stake, has given it access to advanced AI models, providing an edge over rivals like Amazon and Alphabet. Microsoft has integrated AI upgrades across its product lineup, leveraging OpenAI’s technology. Azure, its cloud platform, offers a range of AI tools, while Bing, its search engine, has been enhanced with ChatGPT-like features. Various Office productivity services now promise greater efficiency with the help of AI.
Both AMD and Microsoft have strong prospects in the AI market. While AMD shows potential for stock growth with its new GPU, Microsoft benefits from its extensive user base and range of software solutions. However, considering the earnings per share (EPS) estimates for the next two fiscal years, AMD may have more growth potential. With a forward price-to-earnings ratio of 55, AMD’s stock could rise by 87% over the next two fiscal years, compared to Microsoft’s 36% increase.
In conclusion, AMD appears to be the better AI stock to invest in at the moment. With its expansion into AI and the launch of its new GPU, the company is well-positioned to capitalize on the growing market. However, investors should conduct thorough research and consider their own investment strategies before making any decisions.
(Note: The content of this article is for informational purposes only and should not be interpreted as financial advice. Investing in stocks involves risks, and individuals should consult with a financial advisor before making any investment decisions.)
