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