I'm Buying AMD Over Nvidia Stock in 2024 (Here's Why)

Summary

The 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• 🚗 AMD announced new automotive chips, but they seem outdated compared to competitors.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

00:00

😀 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.

05:00

😊 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.

10:01

😎 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.

15:02

🤑 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.

Keywords

💡AMD

AMD is a semiconductor company that manufactures central processing units (CPUs) and graphics processing units (GPUs) for computers, data centers, and gaming systems. The video discusses how AMD is positioning itself as a competitor to Nvidia with new data center GPUs and consumer desktop/laptop CPUs.

💡data centers

Data centers house large collections of servers and computing infrastructure for running cloud services, websites, applications, AI models, etc. The video states the data center GPU market is growing rapidly and AMD aims to capture more market share.

💡Nvidia

Nvidia is AMD's main competitor, especially in graphics processing units (GPUs) for gaming, data centers, AI acceleration, etc. The video compares AMD's latest data center GPU (MI300X) to Nvidia's H100 GPU.

💡AI boom

The video mentions there is huge growth and demand expected in AI computing, for example to power language models like ChatGPT. This benefits AMD and Nvidia which make GPUs optimized for AI workloads.

💡Lisa Su

Lisa Su is AMD's CEO. She is quoted in the video stating that AMD can supply over $2 billion in 2024 data center revenue based on high customer demand, positioning them to gain market share.

💡Console chips

AMD makes semi-custom chips for the latest Xbox and PlayStation game consoles. The video states that while AMD's gaming revenue is down due to the console cycle, overall console chip revenues are much higher this generation.

💡Automotive chips

The video discusses AMD's new Ryzen Embedded and Versal chips for use in smart cars, infotainment systems, advanced driver assistance systems (ADAS), and autonomous driving.

💡Market share

A key theme is how AMD continues gaining more market share in data center CPUs/GPUs and consumer desktop/laptop CPUs/GPUs at the expense of main competitors Intel and Nvidia.

💡Growth markets

The video emphasizes that AMD competes in several of the fastest growing markets like data center AI, gaming, automotive, etc. This positions them for continued revenue growth.

💡Stock

In concluding, the video states the reasons why AMD's improving competitive position across high growth markets makes their stock attractive over Nvidia in the near future.

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