AMD and NVIDIA
As investors continue to hype up stocks of artificial intelligence chip manufacturing companies, the stock price hit a historic high on Thursday.
AMD’s stock price rose more than 1% in Thursday trading, reaching its all-time high closing price of $162.67, while Nvidia rose nearly 2% to $571.07. After explosive growth in 2023, both companies achieved double-digit percentage increases at the beginning of the year, with AMD’s stock price soaring by 127.6% and Nvidia’s stock price soaring by 238.8%.
The record breaking valuation reflects investors’ sustained interest and desire for companies that design and sell artificial intelligence graphics processors. GPUs were originally designed for playing computer games. But they are also crucial for training and deploying complex artificial intelligence models such as OpenAI’s GPT, leading to a significant increase in chip sales.
Over the past two years, Nvidia has been a major GPU supplier for artificial intelligence companies and the best performing stock in last year’s S&P 500 index.
Investors are increasingly optimistic about AMD, the second largest independent GPU manufacturer. The company announced last year the launch of a new chip that can compete with Nvidia’s H100, which is currently the standard for artificial intelligence applications.
Analysts also believe that AMD is improving its artificial intelligence software, eliminating a major reason why Nvidia chips are more popular than AMD chips.
On Thursday, TSMC
The company that produces Nvidia and AMD chips announced better than expected sales. CEO CC Wei stated that there is strong demand for AI chips using the most advanced manufacturing technologies.
Goldman Sachs analysts led by Toshiya Hari wrote in a report on Thursday that TSMC management believes that manufacturing artificial intelligence chips may account for a “higher percentage of its revenue in its teens” within five years, which has a positive impact on both Nvidia and AMD.
One of the largest buyers of GPUs, CEO Mark Zuckerberg, announced on Thursday that he plans to purchase billions of dollars worth of Nvidia and other GPUs this year.
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