Investing in GPUs for AI – AMD GPUs vs NVIDIA GPUs

It was only 6 months ago that we wrote about “The Artificial Intelligence Stock That Rocked Wall Street” and the title of that article was hardly exaggerating. What we were referring to was the +29% jump in the price of NVIDIA (NASDAQ:NVDA) after an earnings surprise which took the share price to $88 giving the Company a market cap of around $45 billion. A 29% jump for a company that size is rarely seen unless it is explained by a corporate event.

You would not be condemned for thinking that the move was too dramatic and deciding to “wait until it settles down” to begin building a position in what is the closest thing to a pure-play artificial intelligence (AI) stock out there right now. Fast forward to today and as we type this, shares are breaking the $125 barrier after another surprise earnings call which saw another +20% jump bringing NVIDIA’s market cap to $88.5 billion. NVIDIA is now more than half the size of Intel (NASDAQ:INTC).

If you already hold shares in NVDA or you are thinking about opening a position, one of the first things you have to be wondering about is the competitive space for AI chips. Here are some relevant questions we might ask:

  1. What is NVIDIA’s current market share for GPUs? Who are the main players?
  2. Are there other types of chips that can be used as substitutes for GPUs in the context of AI?
  3. Are there any startups building AI chips that could challenge NVIDIA’s domina

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