So far in 2024, the winner of artificial intelligence (AI) rally has been clear, as Nvidia (NASDAQ: NVDA) recorded 116.42% year-to-date gain, compared to a negative performance of 6.06% from its main competitor, Advanced Micro Devices (NASDAQ: AMD) over the same period.
However, the recent stock market sell-off, especially among tech stocks, showcased that the scenery can rapidly change and completely shift the narrative, prompting a question: Which of these two AI stocks is the better pick for the end of 2024?
Despite a recent slump, Nvidia still offers an attractive valuation
Piper Sandler analyst Harsh Kumar recently provided his view on the recent developments surrounding Nvidia on August 7 and called NVDA stock a “tremendous opportunity.”
Picks for you
Notably, on August 3, reports surfaced that Nvidia might be delaying the launch of its newest Blackwell chip lineup for an unspecified period, a claim that the semiconductor maker has refuted since.
Nevertheless, the Piper Sandler analyst thinks that the impact will be severely limited to the upcoming quarters and that demand will still outpace supply and that the recent and upcoming pullbacks in NVDA stock represent favorable entry points for investors.
Kumar states, “Fundamentally, Nvidia remains the strongest player in the AI accelerator space with an estimated share of 80% of the merchant market by 2028. We also believe that strong tailwinds from the Blackwell architecture coming in October will continue to drive revenues well into 2025 as demand exceeds supply.”
On the other hand, AMD stock could profit as well
According to Kumar, any delay within Nvidia production lines presents a potential opportunity for its main competitor, AMD, to seize a chunk of market share.
However, AMD’s benefits don’t stop with Nvidia’s troubles; the recent Intel (NASDAQ: INTC) quarterly report revealed a struggling tech giant that shifted its focus towards restructuring, thus allowing AMD to move up on its market share as well.
While becoming an industry leader might prove challenging, AMD can become the second-best thing in the rapidly expanding AI industry, whose value is set to be measured in the trillions in years to come.
Technical analysis provides further insights into NVDA and AMD stocks
The recent stock market pullback hasn’t been kind on both NVDA and AMD stock, as their current technical indicators point towards a summary “sell” rating.
Furthermore, looking at the recent buying volume, which is reflected through the Relative Strength Index (RSI), both of these stocks are currently experiencing a sub-50 reading and a falling trend, which leans towards an oversold condition, with AMD at 37, and NVDA at 43.
Wall Street is bullish on both AMD and NVDA stocks
Disregarding the technical analysis, on the whole Wall Street analysts assign a “strong buy” rating on both chipmaker’s stocks.
According to the experts, AMD offers a clear advantage in this field. The average price target is set at $190.63, offering investors a potential 40.41% upside.
Conversely, NVDA shares offer “just” 33.81% upside with an average price target of $144.17.
It seems that, according to analysts, investors cannot go wrong when it comes to a choice between these two semiconductor stocks, as both offer strong potential for growth by the end of 2024 and further beyond that.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
