Why AMD could perform better than NVIDIA in 2025

• NVIDIA dominates data center GPUs
• Financial blogger sees growth potential at AMD
• AMD is working on a competitor to NVIDIA’s Blackwell chips

Since the launch of the chatbot ChatGPT in November 2022, there has been a real AI boom. The need to keep up with such applications increases the need for specialized technology in data centers. The undisputed market leader for AI chips is NVIDIA, because the NVIDIA technologies originally developed for graphics cards are also particularly effective for AI applications. With its new Blackwell architecture, which is scheduled to come onto the market in the first quarter of 2025, the industry leader wants to further expand its already large technological lead.

NVIDIA share price explosion

Because NVIDIA plays such a key role in AI applications, the stock has become an investor favorite on the stock market. After the stock rose by around 240 percent in 2023, it has risen by a further 177 percent since the beginning of 2024 (as of December 27, 2024). NVIDIA is now the world’s third-largest listed company by market capitalization behind Apple and Microsoft. But given the high valuation of NVIDIA shares, many investors are now looking for alternatives.

Advanced Micro Devices (AMD) with potential

In this regard, Anthony Di Pizio, financial blogger at The Motley Fool, believes that chip giant AMD could break NVIDIA’s market dominance. Although NVIDIA is currently the leading provider of data center graphics processing units (GPUs) used to develop artificial intelligence (AI) models, AMD is catching up and has recently launched a number of its own AI GPUs, thanks to which it is already doing so some of NVIDIA’s largest customers were won.

While AMD faces a major challenge with NVIDIA’s new Blackwell GPUs, it is working hard to catch up. With AMD’s MI350 series, which is scheduled to come onto the market in the second half of 2025, a serious competitor to NVIDIA’s Blackwell chips has been announced, even if it comes onto the market more than six months later.

AMD is a leader in the AI ​​PC chip segment

Di Pizio also sees another advantage of AMD: its dominance in the market for AI chips in PCs. According to the financial blogger, while data centers play a key role in training AI models and supporting AI inference, the chips in smartphones and computers are now becoming so powerful that some AI workloads can be run directly on the devices. This would allow users to receive an answer more quickly, since chatbot requests, for example, do not have to be transferred to the data center first.

Conclusion

Since NVIDIA already has so much market share, it is likely that it can only shrink. In contrast, AMD is just beginning its entry into this segment, which means the best growth potential is yet to come. In addition, as a leader in the AI ​​PC chip segment, AMD is ideally positioned to benefit from the next big wave of growth in the AI ​​industry, Di Pizio explains why AMD stock could be a great choice for 2025.

Editorial team finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

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