AMI stock is only up 11% so far this year, less than the 21% rise in the S&P 500. Nvidia stock, on the other hand, is up more than 170%.
Yet, even though Nvidia shares NVDA -0.01% did amazingly better in 2024, Bernstein analyst Stacy Rasgon says those shares look like a better bet. AMD’s AMD 2.26% Advancing AI event on Thursday backed up this claim.
AMD said that its new MI325X accelerator chip is faster than Nvidia’s H200 offering. However, the H200 is Nvidia’s older graphics processing unit, and Wall Street has been buzzing about the Blackwell chip that’s about to make a big splash.
Rasgon wrote that the MI325X “appears to offer zero challenge to Blackwell….which not only has significantly better performance but will also be shipping for revenue far earlier.”
The performance numbers AMD gave on MI325X was “likely a little disappointing when compared to Nvidia’s upcoming Blackwell launch,” he said.
This year, AMD’s AI processors are expected to bring in $4.5 billion, and Wall Street thinks that number will go up to $5 billion in 2025.
But Rasgon and his team “didn’t really hear anything to suggest we should expect substantial upside to current expectations” at AMD’s event on Thursday. They also said, “would rather own [Nvidia] at this point in front of Blackwell (where we don’t have to argue with ourselves as to how strong demand might really be”).”
Bernstein analysts have given AMD shares a market perform rating and Nvidia shares an outperform rating.
After what happened, William Stein, an expert at Truist Securities, became less bullish on AMD shares. He said that the event was “necessary, but not sufficient.”
He wrote, “It’s not easy for AMD to get some of the toughest tech customers in the world, like cloud service providers, to commit to buying these products. But we think the real challenge is to convince the real users, enterprise customers, that there is a complete, trustworthy, reliable, and useful alternative to Nvidia.”
While this is going on, Stein believes that AMD does have a portion of the AI hardware market, but he and his colleagues are still worried that AMD will not be able to compete with Nvidia for the premier place.
Stein thinks AMD’s stock is a “hold” and sets a goal price of $156.
A lot of people are interested in AI accelerators, but Ben Reitzes, an analyst at Melius Research, was more pleased by the company’s news about its Turin central processing unit.
“The Turin CPU should get an AI boost from high share at hyperscalers and enterprise share gains in 2025. As the price per core goes up, growth of 20% or more is possible,” he wrote. “As a result, the Turin numbers could be higher than expected compared to the Street, maybe even more so than the high hopes for AI GPUs,” which are graphics processing units.
He thinks that AMD could say “that it has the right server CPU for AI right now” on its earnings call later this month.
“Remember, upside in Turin is actually more helpful to gross margins and helps offset the ramp of GPU” in AMD’s finances, Reitzes said. He kept his buy rating on the stock and set a $205 price target for it.
With these new statements, Cantor Fitzgerald analyst C.J. Muse agreed that AMD is “extending its CPU leadership.” This means that AMD is still ahead of Intel Corp. INTC 1.46% in that market. There is “still a lot of wood to chop” when it comes to AI processors, though.
For him to go higher, he wrote, “we need to see $12B+ in accelerator revenues” by the year 2025. Muse rates AMD stock as “overweight” and sets a $180 goal price for it.
