One of Wall Street’s hottest investments could be poised to get even more impressive over the next twelve months. Indeed, Nvidia (NVDA) is set to break records in 2025, as the company faces “staggering” demand for its Blackwell GPU. The company has already been one of the biggest gainers this year, amid surging AI demand. Now, even Wall Street is looking for a competitor in the market to battle NVDA. It may have been found that in Advanced Micro Devices (AMD).
At press time, Nvidia stock is up 197% year-to-date and doesn’t appear ready to slow down. NVDA is the leading supplier of graphics processing units (GPUs) for data centers, which are used to develop artificial intelligence (AI) models. As chip demand is set to grow in 2025, the company’s shadow over that industry is expected to grow as well. However, there may be an opportunity for competitors to feed off of Nvidia’s growth and pop out of its shadow.
Indeed, Nvidia CEO Jensen Huang believes data center operators will spend $1 trillion upgrading their infrastructure to meet the needs of AI developers over the next four years. This opportunity is big enough to support several GPU suppliers, allowing them to gain ground on the current chipmaker giant. One company in particular that Wall Street is eyeing as a 2025 competitor is AMD.
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AMD Stock To Catch Up to Nvidia in 2025?
AMD recently launched a series of AI GPUs of its own. The company has already won some of Nvidia’s biggest customers and expects to grow in 2025 according to forecasts. AMD stock had a poor 2024, currently down 3% year-to-date. However, a recent development may see AMD rebound and resume its chase of Nvidia.
Nvidia had an estimated 98% share in the market for data center GPUs during 2023. This was due to practically no competition for its flagship H100 chip. However, AMD launched its MI300X GPU in December. The unit quickly attracted many of Nvidia’s top customers like Microsoft, Meta Platforms, and Oracle. According to AMD, many of those data center operators are yielding better performance and a lower cost of ownership by using the MI300X versus the H100. This bodes well for AMD’s attempt to capture market share and pick up ground on Nvidia.
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Nvidia has scored major gains this year, with the firm raking in nearly 170% gains this year. Per Barchart, Nvidia may very well aim for a $220 stock price, which will prompt the firm to hit the $5 trillion market cap. The Bank of America expects Nvidia to rise above $300 billion by the end of this decade.
For AMD stock, Wall Street is preparing for the company to rebound in 2025. This optimism rises due to recent revenue data. AMD generated a record $6.8 billion in total revenue during the third quarter of 2024. This was an 18% increase from the year-ago period. However, its AI-related segments delivered much faster growth. The company’s data center revenue soared 122% to a record $3.5 billion, led by GPU sales. AMD CEO Lisa Su now says GPU revenue alone could hit $5 billion in 2024, which is more than 150% higher than her original forecast of $2 billion coming into the year. Such revenue like this could catapult AMD to the levels of Nvidia, creating the strongest competitor yet in the AI stock space.