I'm Buying AMD Over Nvidia Stock in 2024 (Here's Why)
Summary
TLDRThe video analyzes AMD's position across several key markets - data center GPUs and CPUs, consumer desktop and laptop chips, gaming including discrete GPUs and console SoCs, and embedded applications. It compares AMD's latest products like the MI300 data center GPU and Ryzen 7000 chips to competitors like Nvidia and Intel. The presenter is bullish on AMD taking market share thanks to strong product execution and unprecedented AI/datacenter growth. However Nvidia remains a powerhouse and both companies face supply constraints. The video concludes AMD stock is worth buying over Nvidia due to higher growth, but Nvidia enjoys a competitive edge in core markets.
Takeaways
- 😀 AMD's data center GPUs are poised to take market share from Nvidia due to high demand and long wait times for Nvidia's offerings.
- 👍 AMD's next-gen server CPUs with up to 192 cores could allow them to continue gaining server CPU market share from Intel.
- 💻 The growth of AI is driving increased demand for AMD's consumer desktop and laptop chips.
- 🎮 AMD's Radeon GPUs are slowly taking desktop discrete GPU market share from Nvidia.
- 📉 AMD's gaming revenue is down due to the console market cycle, but overall console chip revenues are higher.
- 🚗 AMD announced new automotive chips, but they seem outdated compared to competitors.
- 🏆 I would buy AMD stock because they will keep gaining market share across multiple high-growth markets.
- 🚀 Data center, consumer CPUs, and automotive are some of AMD's fastest growing markets.
- 😖 Both AMD and Nvidia chips have more demand than supply right now.
- 👍 I have more money invested in Nvidia but AMD's growth makes it a good investment now.
Q & A
What are the key points AMD is making about their new Mi300X chip versus Nvidia's H100?
-AMD claims their Mi300X outperforms the H100 for large language model workloads by 60%, but Nvidia disputes this. After adding optimizations like Nvidia's TensorRT, the H100 is actually faster. The true performance depends on the workload, but AMD being competitive is a big deal.
How much data center GPU revenue is AMD projecting for 2024?
-AMD originally projected $2 billion in 2024 but indicated there is demand for much more than that. They have significant supply and see the potential to exceed $2 billion.
How is AMD gaining server CPU market share from Intel?
-By increasing core counts and shared cache memory. Their 4th gen EPYC chips doubled their server CPU market share since launch. The 5th gen is expected to have up to 192 cores.
Why does AMD expect growth in the PC market and their client revenues?
-The PC market is expected to grow 8-10% in 2024-2025 thanks to new CPUs with AI capabilities. AMD's Ryzen 7000 chips are seeing strong demand already.
How is AMD's gaming revenue impacted by the console market?
-Console chip sales have declined as expected in the console cycle. But higher overall revenues from latest consoles. New consoles likely won't see as much demand as during the pandemic.
What new automotive chips has AMD announced?
-The Ryzen Embedded V2 for infotainment and the Versal chip for ADAS and autonomous driving. But they seem outdated compared to competitors.
Why is the author buying AMD stock over Nvidia?
-Not because AMD beats Nvidia in performance. But because AMD will gain market share in fast growing markets where Nvidia has supply constraints.
How is AMD competing with Nvidia in AI and autonomous driving?
-With their Mi300X GPU vs Nvidia's H100 for AI. And their Versal chip for autonomous driving vs Nvidia's Hyperion.
What are the key markets where AMD competes with Nvidia and Intel?
-Data center, consumer PCs and GPUs, gaming consoles and cards, embedded/automotive.
What are the growth projections for key AMD markets?
-Data center GPUs expected to grow 24% CAGR. Global gaming consoles 5% CAGR. Smart car market 17% CAGR.
Outlines
😀 AMD's new data center GPUs aim to compete with Nvidia's
Paragraph 1 introduces AMD's new data center GPU, the MI300X, which is designed to compete with Nvidia's H100 GPUs for AI workloads. It discusses the benchmarks between the two chips, with each company disputing the other's performance claims. The AI market is growing rapidly, so there is room for both AMD and Nvidia to gain market share.
😊 AMD expects to grow data center revenue, but faces supply constraints
Paragraph 2 covers AMD's expected $2 billion in data center revenue next year, which Lisa Su indicates could be conservative given high customer demand. But supply is tight, so AMD and competitors like Nvidia will be challenged to meet the surging demand for AI accelerators.
😎 AMD gaining server CPU share with latest EPYC processors
Paragraph 3 discusses AMD's EPYC server processors, which have doubled AMD's server CPU market share since their latest generation launch in 2022. AMD's upcoming next-gen EPYC chip Turin will have even more cores and shared memory to continue taking share from Intel.
🤑 AMD's growth being driven by client segment
Paragraph 4 explains how AMD's client segment, which includes PC CPUs and GPUs, grew revenue over 40% year-over-year. This growth is expected to continue with new Ryzen chips having built-in NPUs for AI workloads. The PC market is also forecasted to grow after declines during the pandemic.
😍 AMD announces new mainstream GPUs and console chips are aging
Paragraph 5 covers AMD's new Radeon RX 7600 XT GPUs for mainstream gaming and content creation. It also mentions how revenue from semi-custom chips in consoles is declining since the new Xbox and PlayStation are now over 3 years old. The console market has slower growth ahead.
🤔 AMD's automotive chips fail to impress
Paragraph 6 discusses AMD's new automotive chips, the Ryzen V2A and Versal, announced at CES 2023. But these chips seem outdated, with key competitors like Nvidia and Qualcomm offering more advanced solutions for smart vehicles and ADAS. More innovation seems needed from AMD.
👍 Yes, AMD stock looks attractive compared to Nvidia
Paragraph 7 concludes by recommending AMD stock over Nvidia, since AMD is competing well in key segments like data center and gaming GPUs and taking market share from Intel in server CPUs. Nvidia also has supply constraints. AMD's growth prospects appear strong.
Mindmap
Keywords
💡AMD
💡data centers
💡Nvidia
💡AI boom
💡Lisa Su
💡Console chips
💡Automotive chips
💡Market share
💡Growth markets
💡Stock
Highlights
AMD is in a great position to increase their data center GPU market share over the next few quarters.
AMD's current 4th gen server CPUs were the first x86 data center CPUs on TSMC's 5nm process. They have up to 128 cores.
AMD has more than doubled their server CPU market share since releasing their latest EPYC processors in 2022.
Global PC shipments are expected to grow around 8-10% per year in 2024 and 2025 thanks to AI chips.
AMD's next gen client CPUs and Intel's will have built-in NPUs for AI workloads like background blurring and ray tracing.
AMD is working with Microsoft to optimize Windows for their on-chip AI engines.
AMD's new Radeon RX 7600 XT GPUs focus on rate tracing and AI workloads at $330 price point.
AMD owns around 17% of the desktop GPU market, up from 10% four quarters earlier.
Overall gaming revenue down due to declining console chip sales, but higher revenues per console generation.
New AMD automotive chips announced, but they seem outdated compared to competitors.
AMD competes with Nvidia in data center, consumer desktop, gaming console, automotive and robotics chips.
AMD's GPUs are legit competitors to Nvidia's despite supply constraints on both sides.
AMD will keep gaining market share in fast growing markets like data center and consumer desktop.
I would buy AMD over Nvidia right now because they will gain share in supply constrained markets.
It's important to understand the technology behind stocks to make the best investments.
Transcripts
it is AMD they got a new chip and
they're looking to take on Nvidia this
is about proving that AMD is a suitable
competitor to nvidia's h100 chip the
Magnificent 7 quote unquote I would add
AMD to that list for sure 47 analysts
currently cover AMD 37 have buys there's
10 holds there's no underperforms or
sells Wall Street says that AMD stock is
setting up for a massive year and I
agree but not for the reasons that you
might think so in this episode I'm going
to answer one simple question is AMD
stock finally worth buying over Nvidia
or has it already hit its peak your time
is valuable so let's get right into it
first things first I'm not here to keep
you hostage here's everything I'm going
to talk about amd's Data Center gpus and
CPUs their consumer CPUs for desktops
and laptops their gaming division which
includes gpus for PCs and custom chips
for game consoles they're embedded
solutions for markets like Robotics and
self-driving cars and of course whether
I think AMD is finally worth buying over
Nvidia stock all right let's jump in
with data centers the data center GPU
Market is expected to almost 7x in size
over the next 9 years which is a
compound annual growth rate of 24% so
AMD is going to benefit big time from
this AI boom even if they just keep
their current market share of 3% for
data center gpus but that's not what's
going to happen AMD is in a great
position to increase their market share
over the next few quarters for a few key
reasons first Nvidia can't meet all this
demand alone as cloud service providers
and supercomputing clusters keep placing
massive orders for h100s the weit times
are growing to a year or longer guess
who companies are going to buy from if
they don't want to wait that long now
let's talk about the gpus themselves
about a month ago AMD officially
launched their Mi 300X which is designed
to compete directly with the h100s in
both a single and 8gpu configuration
duration this launch event actually
kicked off a battle between AMD and
Nvidia see according to their
presentation amd's Mi 300X outperforms
the h100 by about 60% when it comes to
running large language models well
Nvidia published a blog post refuting
amd's results it turns out that AMD
didn't include something called tensor
RT LM in those tests which is a piece of
software that envidia released to
optimize gpus specifically for these
kinds of workloads I covered tensor RT
llm last fall right after Nvidia
announced it because it doubled the H1
100's performance for inference giving
Nvidia a massive lead over other chip
makers at the time that software package
actually makes the h100s 25% faster than
amd's Mi 300X not the other way around
but AMD followed up with a blog post of
their own where they redid the tests
using nvidia's optimizations as well as
adding in their own and this this time
their results showed that the Mi 300X
was still around 30% faster than the
h100s whether that ends up being true
really depends on the specific workload
and the rest of the system doing the
processing but AMD being able to compete
with Nvidia at all this early into the
AI boom is a pretty big deal as a result
AMD is expecting to ramp up to $2
billion in data center Revenue but check
out this quick clip from CNBC where Lisa
Sue talks about amd's place in this
market and tell me she isn't lowballing
that estimate thank you Lisa for joining
us today uh when you went on stage you
you reiterated a common theme that this
Market is growing much faster than you
anticipated and you more than doubled
your total addressable Market what about
your 2024 estimates uh youit you said
previously it was $2 billion in sales is
that going to change anytime soon given
this demand you know to your question
yeah I mean look the AI Market over the
last you know year has just exploded
right I mean chat GPT you know you know
has you know really kind of changed our
perspective for what geni can do so we
originally thought the uh total market
for um for uh data center AI
accelerators would be about 300 150 uh
billion as we got into uh 2027 and now
we think it's going to be over 400
billion so yeah a much much larger
market um the reason for that is frankly
everybody wants to use AI we need more
training we need more inference um you
know we did um in our last conference
call also talk about sort of the am D
opportunity uh for AI uh we you know we
view next year will be about $2 billion
in Revenue um that's what we have you
know very very clear line of sight to
but I have to say um you know customers
want more there's very high customer
demand and we have supply for a lot more
than two billion as well uh so we're
excited to see how the next uh next year
will play out so just to reiterate for
our audience too because the issue with
Nvidia is that there's been so many
comments with Supply especially when it
comes to Advanced packaging tsmc so
you're not facing that well look I think
we all um probably underestimated the
demand for AI if you just took took a
look at you know the market a year ago I
mean there's been just a significant um
demand overall so yes it's tight in the
semiconductor Market but this is what we
do for a living I mean we spend a lot of
time with our partners we've been
planning for this launch we plan for
Success so uh yeah we have a significant
supply for next year I'm not saying that
AMD is going to magically beat Nvidia in
2024 and for the sake of full
transparency I have a lot more money in
Nvidia stock than AMD since their h200
gpus are coming out in a few months and
their next Generation Blackwell chips
should be out soon after that and while
I'm excited to break them down for you
the truth is that both of those chips
will probably be just as Supply limited
as the h100s which makes this Market big
enough for more than one winner but
that's not the only Market where AMD
will gain ground in 2024 amd's current
fourth generation epic server processors
were the first x86 data Center CPUs
built on tsmc's 5 Nom process they run
on amd's zen4 architecture and can have
up to a whopping 128 compute cores on a
single chip another special thing about
amd's server chips is the size of their
L3 cash which is the shared pool of
memory that all of these cores can
access to transfer data between them
increasing the number of cores and the
amount of memory they can share are two
tricks that AMD has been using to
consistently take market share away from
Intel since 2017 but these fourth
generation chips took it to a whole
another level AMD has more than doubled
their server CPU market share since they
released these latest epic processors
back in 2022 and amd's revenue from
these chips grew by a whopping 50%
quarter over quarter huh talk about fast
growth and photos of prototypes for
their fifth generation processors code
named Turin are starting to appear
online and they have some very
noticeable upgrades for example these
chips will be manufactured using tsmc's
4 nanom n4p process and they'll have up
to 192 cores on them and each core will
have access to roughly twice as much
shared memory versus their current
fourth generation chips Now intel isn't
exactly standing still here either their
Sierra Forest chips are scheduled for
release in the first half of 2024 and
they could have up to a whopping
288 cores on them that's 50% more than
amd's next generation chips but these
are all efficiency cores and Intel's
efficiency cores come with some big
concessions like not supporting
hyperthreading I'll break down the
latest chips from both companies as they
come out so stay tuned for that but for
now if AMD can keep taking big chunks of
the data center Market from Intel every
year like they did in 2022 and 2023
their Data Center business will be
booming AMD is currently at an
interesting Crossroad as a company they
make roughly the same top line revenues
from all four of their major business
units however it's their client revenues
That Grew by over 40% year-over-year and
should keep growing for a few key
reasons first the PC market has been
shrinking for more than a decade now
global PC shipments fell out of 4%
compound annual rate of decline from
2011 to 2019 and they didn't pick back
up until everyone upgraded their
computers to work from home during the
pandemic and right after that PC
shipments fell again but now Market
analysts expect Global PC shipments to
actually grow by around 8 to 10% per
year in 2024 and 2025 thanks to aip's
during their latest earnings call Lisa
Sue said that amd's client Revenue grew
by 42% year over-year because the PC
market conditions have already started
to improve and their current ryzen 7000
series chips are seeing strong demand
and I expect that Trend to continue with
amd's new ryzen 8000 chips as well as
Intel's core Ultra processors both of
which will have built-in npus npus are
neural processing units which are
optimized to run the neural networks
behind many current AI workloads our
computers already do a lot of AI
processing today from blurring out our
backgrounds during video calls to video
games supporting raid tracing and dlss
which stands for deep learning super
sampling if you add in AI powered tools
and apps like Microsoft's co-pilots open
AI gpts Adobe Firefly or wonder Studio
you can see the clear need for Consumer
grade AI processors and it's not just
about creating content I have no doubt
that we'll be consuming the news
watching movies listening to music and
playing games that might have been
created by humans but are personalized
by AI for each of us individually to
enable these kinds of use cases AMD is
working directly with Microsoft to make
sure that the next generation of windows
will squeeze the most out of their
onchip AI engines and that brings me
right to amd's gaming segment a couple
of weeks ago at CES AMD showed off their
new Radeon graphics cards the RX 7600
XTS these cards are priced at roughly
$330 and they focus on powering
processes like rate tracing for video
games at 1080p resolutions as well as
generative Ai and content creation
workloads that price point means they
don't really compete with any of the
graphics cards that Nvidia announced
during CES since they're anywhere from
two to four times more expensive than
amds instead these Radeon cards will
probably end up competing with Intel's
entrylevel Arc gpus the next generation
of which should drop around summertime
so we'll have to wait and see the
benchmarks and how well those cards end
up selling for now I think AMD is in a
great position to keep taking more of
the desktop GPU Market just like they
have been for over a year now recent
estimates show that AMD owns around 177%
of the market up from 10% four quarters
earlier even though amd's consumer GPU
sales are up year-over-year their
overall Gaming revenue is down by 8% how
come well because AMD also makes the
semi-custom chips for both Xbox and
PlayStation and the time between new
console releases is getting longer and
longer Lisa Sue pointed out that even
though console chip sales have declined
in line with amd's projections for this
point in the console cycle overall
revenues from this generation of
consoles is significant higher than
previous generations thanks to strong
demand for both the latest Xbox and
Playstation but I should point out that
the Xbox series X and the PlayStation 5
both came out in November of 2020 which
was also the middle of the Pandemic
those consoles are now 3 years old and
the world has long since opened back up
from the lockdowns so whenever the next
generation of game consoles do come out
they might not see as much pent up
demand as they would have during the
pandemic also thanks to the rise of
mobile gaming the global game console
Market is expected to grow by a compound
annual growth rate of just 5% for the
next decade so this probably isn't the
market that will move the needle for AMD
over the long term and that brings us to
amd's embedded segment a few years ago I
made a video about Tesla switching from
Intel's atom CPUs over to amd's ryzen
apus in the model 3 and the model y
amd's chips are also in the Tesla Model
X and Model S well AMD and anounced two
new Automotive chips at CES the first
chip is amd's ryzen embedded v2a which
is designed to power driver dashboards
passenger displays and infotainment
systems like Teslas this chip has six
second generation Zen compute cores and
can come with either an integrated GPU
or a more modern discrete graphics chip
depending on the number of displays that
it needs to power the second chip is
called versal which focuses on Advanced
Driver assistance systems this chip
comes with four armed compute cores that
act as AI engines and one fpga or field
programmable gate array the combination
of programmable logic and AI
acceleration makes these chips great for
applications like object detection in
forward-looking cameras in Cabin
monitoring parking AIDS using liar or
radar for object detection and tracking
and of course autonomous driving
Honestly though I really wasn't
impressed with these chips ryzen 2 is 5
years old now and even the fpga they
chose is turning three I know that
Automotive chips need to pass a ton of
regulatory reliability and safety tests
but AMD competes with every other major
chip maker in this market and for good
reasons the global smart car market no
not that one the market for connected
Vehicles equipped with some level of
autonomy and other Advanced Technologies
is expected to 4X over the next 9 years
which is a 17% compound annual growth
rate that's why Nvidia has their
Hyperion Hardware platform for
autonomous navigation Intel has their
very successful mobile eye program that
got spun out into its own company and
even went public back in 20122 and
qualcomm's L to Snapdragon chips for the
auto market can power Advanced Driver
assistance and infotainment systems with
a single chip and qualcomm's chips are
built on a 4 nanometer process while
amd's versal chip is an older 7
nanometer one but to amd's credit Tesla
keeps picking their chips so I'm
probably missing something important
here all right I know this video is a
little long but I want it to be thorough
since AMD competes with Nvidia in just
about every Market I covered Data Center
gpus and soon CPUs when nvidia's Grace
chip comes out consumer gpus and in a
few quarters consumer CPUs when Nvidia
starts building arm chips for Windows
PCS in 2025 and at least a few different
markets for embedded chips like Robotics
and Smart Cars nope still not you so if
you feel I've earned it consider hitting
the like button and subscribing to the
channel that really helps me out and it
lets me know to put out more deep Dives
like this thanks and with that out of
the way there's really only one question
left to answer would I buy AMD over
Nvidia stock right now well the answer
is actually yes but not for the reasons
you might have thought if you didn't
just watch this entire video amd's Mi
300X is a legit competitor to nvidia's
h100s even if it doesn't beat it and
amd's fourth generation epic CPUs are
strong competitors to Intel Zeon chips
the radon gpus are slowly taking market
share away from nvidia's GeForce cards
and they dominate the chip market for
video game consoles on top of that we
know that Nvidia has way more demand for
their chips than they have Supply at
least for right now and that means that
AMD will keep gaining market share in
these markets which happen to be some of
the fastest growing markets on the
planet this is exactly why it's so
important to understand the science
behind the stocks thanks for watching
and until next time this is ticker symol
U my name is Alex reminding you that the
best investment you can make is in
you
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