Advanced Micro Devices (NASDAQ: AMD ) The stock fell in Tuesday’s trading. The semiconductor company’s share price closed down 4.8 percent in the daily session, according to data from S&P Global Market Intelligence. Nvidiaits main rival in the graphics processing unit (GPU) space actually gained 1.1% in the session.
There was no business-related news that dragged down AMD stock today, but the company’s share price fell after the opening of Nvidia’s GPU Technology Conference (GTC) yesterday. Good news for Nvidia stock has often helped fuel bullish sentiment for AMD stock, even though the two companies are rivals.
Although Nvidia managed to post small gains in Tuesday’s trading and analysts seemed excited about the next-generation Blackwell chip that the company unveiled yesterday, other high-profile artificial intelligence (AI) stocks today Lost land. Investors seem to be betting that AI stock will rise after the announcements at GTC. When it didn’t pan out for AMD, some investors opted to sell out of the stock.
Is AMD stock a buy now?
AMD has been on a tear over the past year. Investors have poured into stocks in anticipation of potentially massive AI-related demand tailwinds on the horizon. Even with today’s valuation pullback, the company’s shares are still trading 23% higher in 2024 and about 85% higher than last year.
But while Nvidia has seen explosive sales and revenue growth as businesses and institutions buy its GPUs to run artificial intelligence applications, AI isn’t making much headway for AMD just yet. For reference, AMD grew sales about 10% year-over-year in the fourth quarter of last year, and its midpoint guidance calls for sales to be roughly flat in the first quarter of this year. Meanwhile, Nvidia posted a 265% year-over-year sales increase in Q4 and is guiding for nearly 234% growth in the first quarter of this year.
For long-term investors, building a position in AMD stock still looks like a worthwhile move — and it’s possible that artificial intelligence will accelerate growth later this year. But the stock actually looks riskier than Nvidia because its approach to the AI space is more speculative.
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Keith Noonan has no position in any stocks. The Motley Fool has positions and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a Disclosure Policy.
AMD Fell Today — Is It an Opportunity to Buy Artificial Intelligence (AI) Stock? Originally published by The Motley Fool.