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Rising to the challenge: This ambitious ‘Big Seven’ stock is one to watch in 2024


For more than a year, the “Big Seven” stocks have been setting the standard for what the market defines as growth investing. Nvidia (Nasdaq: NVDA)designers of specialized chips for accelerated processing AI (AI) system, these seven giant stocks rose an average of 85% in 52 weeks.

But stock groupings like The Seven are always changing. Some of the current members are not doing their job and will be replaced one day soon. apple rose only 10% over the same period, while Tesla It was actually down 11%.

Meanwhile, a handful of stocks are rising from below. in particular, Advanced Micro Devices (NASDAQ:AMD) It looks like it will soon replace Apple or Tesla in the “Big Seven” society.

This is why I think AMD belongs in the “Big Seven” discussion in 2024.

The quicksand of artificial intelligence supremacy

Nvidia may look like the undisputed ruler of artificial intelligence chips so far, but the company’s position is far from guaranteed.

For example, some of the world’s largest and most powerful supercomputers are hard at work training the next generation of eye-opening artificial intelligence systems. Five of today’s 10 most powerful supercomputers use Nvidia’s A100 or H100 accelerators.

Meanwhile, AMD’s Instinct MI250X accelerator chips power two systems on the top 10 list, which includes major performers. In other words, system builders seeking extreme performance are not strictly limited to Nvidia solutions.

Both companies are now launching a new family of artificial intelligence accelerators; you should see their names in the next few editions of elite supercomputer rankings. So far, performance benchmarks for the H200 and Instinct MI300X accelerators have been limited to tests designed by Nvidia and AMD themselves, with the two companies criticizing each other for cherry-picking favorable benchmarks or parameters. Nothing new under the sun, right?

But it’s fair to say that AMD offers comparable raw performance, which could turn into a huge advantage if it were priced significantly lower. Then you have to consider the power requirements of each solution. Anyone can win a performance comparison by throwing more hardware at the performance. question, but users of these muscular systems’ artificial intelligence builds may choose hardware based on expected power bills, cooling systems and other real-world practicalities.

AMD has historically fought hard on these fronts. I can’t wait to see actual wattage measurements for Nvidia’s H200 and AMD’s MI300X accelerators.

AMD aggressively competes for AI accelerator leadership

So AMD isn’t going to sit idly by and let Nvidia get every AI training system contract without any effort. AMD’s current solutions come with more, faster memory, while Nvidia usually claims the raw number processing crown, but you can find real-world use cases. Again, I’m looking forward to the next round of AI accelerator upgrades finding their way to the end in 2024 market customers.

To be fair, AMD is currently a few steps behind. The company’s data center graphics processing unit (GPU) sales in the fourth quarter of 2023 were just over $400 million. Nvidia did not break out its sales. The financial report showed sales of AI accelerators, but the company’s overall data center revenue quintupled to $18.4 billion during the same reporting period.

So AMD needs to catch up, but the company has strong AI accelerator designs and relies on the same third-party manufacturing solutions as Nvidia. If the balance of AI power shifts from Nvidia to AMD this year, people may start including the runner-up artificial intelligence chip specialist instead of Tesla in their “Big Seven” discussions.

The serious challenge from AMD is the main reason I’m not buying Nvidia stock right now.Instead, I recently cashed out some Nvidia profits and reinvested them in Undervalued Growth Stocks AMD stock looks a bit rich to me right now, too, but the company is a serious challenger to Nvidia’s AI supremacy.

Should you invest $1,000 in Advanced Micro Devices right now?

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Anders Bylund The Motley Fool owns and recommends jobs at Advanced Micro Devices, Apple, Nvidia, and Tesla. The Motley Fool owns and recommends Advanced Micro Devices, Apple, Nvidia and Tesla. disclosure policy.

Rising to the challenge: This ambitious ‘Big Seven’ stock is one to watch in 2024 Originally published by The Motley Fool



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