We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights Advanced Micro Devices, NVIDIA, Microsoft and Alphabet
Read MoreHide Full Article
For Immediate Release
Chicago, IL – June 4, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Advanced Micro Devices (AMD - Free Report) , NVIDIA (NVDA - Free Report) , Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
AMD-NVIDIA A.I. Rivalry Escalates with New Product Launches
The fight for AI supremacy between Advanced Micro Devices and NVIDIA is escalating, with both launching new chips at Computex 2024.
AMD is playing catch-up to NVIDIA's dominance in the AI space, which has been riding on strong spending as the digital transformation (DX) of enterprises continues. Per IDC estimates, worldwide spending on DX is forecast to reach roughly $4 trillion in 2027, witnessing a CAGR of 16.2% between 2022 and 2027.
Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. Generative AI (GenAI) software spending is expected to surge from 8% in 2023 to 35% by 2027. Deloitte expects enterprise spending on GenAI to increase 30% in 2024 from $16 billion in 2023.
This massive splurge by enterprises presents significant growth opportunities for both chipmakers.
AMD & NVIDIA Focus on Frequent Launch of Chips
Both AMD and NVIDIA are now focusing on the faster launch of AI-enabled chips to stay ahead of the competition.
At Computex 2024, AMD unveiled its Instinct accelerator roadmap that includes the new Instinct MI325X accelerator, which is planned to be available in fourth-quarter 2024. Instinct MI325X accelerator features 288GB of ultra-fast HBM3E memory that extends AMD's GenAI performance footprint.
The next-generation CDNA 4 architecture, expected in 2025, will power the AMD Instinct MI350 Series. It is expected to drive up to 35X better AI inference performance compared to the AMD Instinct MI300 Series with AMD CDNA 3. The CDNA "Next" architecture will power MI400 series accelerators planned for 2026.
AMD unveiled the fifth generation of EPYC server processors (Turin) that leverage the Zen 5 core. It further expanded its portfolio with the launch of the Ryzen AI 300 Series, the third generation of AMD AI-enabled mobile processors, and Ryzen 9000 Series processors for laptop and desktop PCs.
At Computex, Microsoft, HP, Lenovo and Asus unveiled new PCs powered by third-gen AMD Ryzen AI 300 Series processors and AMD Ryzen 9000 Series desktop processors.
NVIDIA recently expanded its portfolio with the announcement of the next-generation AI chip architecture, Rubin, which will leverage HBM4. This follows the March announcement of Blackwell, which is currently in production and is expected to ship to customers later this year.
The most valuable chip company now plans to release new AI chip models annually instead of its previous two-year update timeline. NVIDIA also announced a plethora of new tools and software models at Computex 2024.
NVIDIA's yearly launch decision reflects the ongoing competitive frenzy in the AI chip market and its urgency to maintain its dominant position, which is not only threatened by AMD and Intel but also by initiatives taken by Microsoft, Alphabet and Meta Platforms.
Tech Giants Spicing Up AI Race
Microsoft's Maia 100 is designed for AI purposes. The Maia 100 AI accelerator is capable of running cloud AI workloads like large language model training and inference. It is powered by a 5-nanometer TSMC process and has 105 billion transistors.
Alphabet's Google has introduced the Axion central processing unit (CPU) to support its AI work in data centers. Axion processors are its first tailored Arm-based CPUs designed to deliver robust performance and energy efficiency. These CPUs deliver instances with up to 30% better performance than the fastest general-purpose Arm-based instances.
Meta followed Google to introduce the next generation of the Meta Training and Inference Accelerator (MTIA), which is a family of customized chips designed for Meta's AI workloads. MTIA will support new generative AI products and services, recommendation systems, and advanced AI research. The accelerator comes with an 8x8 grid of processing elements, which deliver increased dense compute performance (3.5x over MTIA v1) and a sparse compute performance.
Conclusion
NVIDIA has returned a whopping 121.4% year to date, outperforming AMD, Microsoft and Alphabet's growth of 13.2%, 10.4% and 23.5%, respectively.
NVDA is enjoying dominance in the AI-space thanks to its next-generation chips with high computing power that have been the top choice for enterprises. However, AMD, with its latest products, seems well-equipped to challenge NVDA not only in the data center market but also in the growing AI-enabled consumer PC market over the long haul.
NVIDIA currently sports a Zacks Rank #1 (Strong Buy) with a Growth Score of A, a combination that offers a good investment opportunity, per the Zacks proprietary methodology. A Momentum Score of B makes NVDA an attractive pick for investors. You can see the complete list of today's Zacks #1 Rank stocks here.
However, investors should wait for a better entry point for AMD, which currently has a Zacks Rank #3 (Hold), given the modest growth prospect in the near term. Moreover, AMD is trading at a premium with a forward 12-month P/E of 40.11X compared with the Zacks Electronics - Semiconductors industry's 32.92X and NVIDIA's 38.12X, reflecting a stretched valuation.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights Advanced Micro Devices, NVIDIA, Microsoft and Alphabet
For Immediate Release
Chicago, IL – June 4, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Advanced Micro Devices (AMD - Free Report) , NVIDIA (NVDA - Free Report) , Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
AMD-NVIDIA A.I. Rivalry Escalates with New Product Launches
The fight for AI supremacy between Advanced Micro Devices and NVIDIA is escalating, with both launching new chips at Computex 2024.
AMD is playing catch-up to NVIDIA's dominance in the AI space, which has been riding on strong spending as the digital transformation (DX) of enterprises continues. Per IDC estimates, worldwide spending on DX is forecast to reach roughly $4 trillion in 2027, witnessing a CAGR of 16.2% between 2022 and 2027.
Gartner estimates spending on AI software to witness a CAGR of 19.1% between 2022 and 2027 to hit $297 billion in 2027. Generative AI (GenAI) software spending is expected to surge from 8% in 2023 to 35% by 2027. Deloitte expects enterprise spending on GenAI to increase 30% in 2024 from $16 billion in 2023.
This massive splurge by enterprises presents significant growth opportunities for both chipmakers.
AMD & NVIDIA Focus on Frequent Launch of Chips
Both AMD and NVIDIA are now focusing on the faster launch of AI-enabled chips to stay ahead of the competition.
At Computex 2024, AMD unveiled its Instinct accelerator roadmap that includes the new Instinct MI325X accelerator, which is planned to be available in fourth-quarter 2024. Instinct MI325X accelerator features 288GB of ultra-fast HBM3E memory that extends AMD's GenAI performance footprint.
The next-generation CDNA 4 architecture, expected in 2025, will power the AMD Instinct MI350 Series. It is expected to drive up to 35X better AI inference performance compared to the AMD Instinct MI300 Series with AMD CDNA 3. The CDNA "Next" architecture will power MI400 series accelerators planned for 2026.
AMD unveiled the fifth generation of EPYC server processors (Turin) that leverage the Zen 5 core. It further expanded its portfolio with the launch of the Ryzen AI 300 Series, the third generation of AMD AI-enabled mobile processors, and Ryzen 9000 Series processors for laptop and desktop PCs.
At Computex, Microsoft, HP, Lenovo and Asus unveiled new PCs powered by third-gen AMD Ryzen AI 300 Series processors and AMD Ryzen 9000 Series desktop processors.
NVIDIA recently expanded its portfolio with the announcement of the next-generation AI chip architecture, Rubin, which will leverage HBM4. This follows the March announcement of Blackwell, which is currently in production and is expected to ship to customers later this year.
The most valuable chip company now plans to release new AI chip models annually instead of its previous two-year update timeline. NVIDIA also announced a plethora of new tools and software models at Computex 2024.
NVIDIA's yearly launch decision reflects the ongoing competitive frenzy in the AI chip market and its urgency to maintain its dominant position, which is not only threatened by AMD and Intel but also by initiatives taken by Microsoft, Alphabet and Meta Platforms.
Tech Giants Spicing Up AI Race
Microsoft's Maia 100 is designed for AI purposes. The Maia 100 AI accelerator is capable of running cloud AI workloads like large language model training and inference. It is powered by a 5-nanometer TSMC process and has 105 billion transistors.
Alphabet's Google has introduced the Axion central processing unit (CPU) to support its AI work in data centers. Axion processors are its first tailored Arm-based CPUs designed to deliver robust performance and energy efficiency. These CPUs deliver instances with up to 30% better performance than the fastest general-purpose Arm-based instances.
Meta followed Google to introduce the next generation of the Meta Training and Inference Accelerator (MTIA), which is a family of customized chips designed for Meta's AI workloads. MTIA will support new generative AI products and services, recommendation systems, and advanced AI research. The accelerator comes with an 8x8 grid of processing elements, which deliver increased dense compute performance (3.5x over MTIA v1) and a sparse compute performance.
Conclusion
NVIDIA has returned a whopping 121.4% year to date, outperforming AMD, Microsoft and Alphabet's growth of 13.2%, 10.4% and 23.5%, respectively.
NVDA is enjoying dominance in the AI-space thanks to its next-generation chips with high computing power that have been the top choice for enterprises. However, AMD, with its latest products, seems well-equipped to challenge NVDA not only in the data center market but also in the growing AI-enabled consumer PC market over the long haul.
NVIDIA currently sports a Zacks Rank #1 (Strong Buy) with a Growth Score of A, a combination that offers a good investment opportunity, per the Zacks proprietary methodology. A Momentum Score of B makes NVDA an attractive pick for investors. You can see the complete list of today's Zacks #1 Rank stocks here.
However, investors should wait for a better entry point for AMD, which currently has a Zacks Rank #3 (Hold), given the modest growth prospect in the near term. Moreover, AMD is trading at a premium with a forward 12-month P/E of 40.11X compared with the Zacks Electronics - Semiconductors industry's 32.92X and NVIDIA's 38.12X, reflecting a stretched valuation.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.