Comparing Advanced Micro Devices and Broadcom for AI Investment

Thursday, 21 March 2024, 09:25

In the battle of AI chipmakers, Advanced Micro Devices (AMD) is positioned to benefit from its strong presence in AI PCs and data center GPUs, while Broadcom's growth hinges on its custom AI chips. AMD's diversified approach to tapping the AI market suggests it may be a better investment choice despite Broadcom's short-term AI revenue superiority. With AMD boasting a lower valuation and higher projected earnings growth rate, investors may find more value and growth potential in this semiconductor stock.

https://store.livarava.com/b770819a-e766-11ee-968f-5254a2021b2b.jpe — Comparing Advanced Micro Devices and Broadcom for AI Investment

The case for Advanced Micro Devices

AMD stands to gain from AI adoption in data centers and PCs, with expectations of substantial revenue growth in 2024.

Data Center Growth

AMD's data center GPUs sales are surging, driven by AI accelerators.
Revenue expectations for AI GPUs are optimistic, hinting at a strong 2024 performance.

Client Processor Business

Ryzen CPUs powering majority of AI PCs, showing potential for increased market share.
A strong pipeline of AI chips to drive future growth in the AI PC market.

The case for Broadcom

Broadcom leads in custom AI chips but faces challenges in other semiconductor markets despite AI revenue growth.

Custom AI Chip Market

Revenue from custom AI chips showing significant growth, aiming for $10 billion in sales in 2024.
Projected revenue opportunity from custom AI chips suggests long-term growth potential.

Challenges Faced

Broadcom struggling in other semiconductor niches like broadband and wireless markets.
Short-term AI growth may not be enough to offset overall business challenges.

While Broadcom shows immediate AI revenue success, AMD's lower valuation, higher growth projections, and diversified AI approach position it favorably for long-term investment in the AI chip market.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.