Beyond Nvidia: Why the Next Phase of AI Could Crown a New Market Leader
AMD looks poised to be a big winner in the next phase of AI.
Overview
Nvidia (NASDAQ: NVDA) was the undisputed chip design champion during the first phase of the AI megatrend, when workloads centered on the training of frontier large language models (LLMs). Its powerful graphics processing units (GPUs) were ideal for this task, and it benefited even more from the wide moat provided by its CUDA software platform, which was where most foundational AI code was written. The chipmaker sold vast numbers of its GPUs, and continues to.
However, in the next phase of the AI trend, the center of gravity is shifting toward inference and agentic AI workloads, and with that, there could be a shift in the marketplace. The big winner of this phase looks like it may be Advanced Micro Devices (NASDAQ: AMD). While it is highly unlikely to unseat Nvidia as the leader in processors for AI model training or surpass its market cap, AMD's stock looks poised to outperform its larger rival over the next few years.
Details
There are two powerful tailwinds forming that bode well for AMD. The first is the shift toward AI inference -- applying AI to real-world problems -- which is eventually expected to become a much bigger market than LLM training. As an ongoing expense, there is much more emphasis on cost-per-inference, and these processes tend to revolve much more around access to memory than raw compute power. AMD is addressing this in two ways.
Source
Originally published at www.fool.com.