Advanced Micro Devices (AMD) Stock

AI stocks dropped as investors reacted to news about a possibly cheaper Chinese AI model, leading them to reconsider the large amounts of money being spent on AI infrastructure in the West.

Advanced Micro Devices (NASDAQ: AMD) has not been able to take full advantage of the artificial intelligence (AI) trend, which has been a major topic in the financial markets for the last two years. On Friday, January 24, AMD's stock was priced at $122.84, but by January 27, it had fallen to $117.11.

Cathie Wood is known for making bold investments in technology, and she gained this reputation by achieving a 153% return in 2020.

The AI revolution is here, and investors are eager to invest in companies that are deeply engaged in this field.

Regularly purchasing shares in companies that are expanding can help you accumulate significant wealth. Currently, a promising area to find growth stocks is in artificial intelligence (AI), which is projected to experience considerable growth in the next ten years.

In 2024, many chip stocks did well, but Intel (INTC -3.43%) and Advanced Micro Devices (AMD -0.16%) did not perform as strongly. Intel's stock dropped by around 60% last year, and AMD's shares decreased by about 18%.

In 2024, the stock market performed well again, and there are still good chances to invest as the new year begins. Companies that support the use of artificial intelligence (AI) are likely to provide returns for investors, but it's essential to keep realistic expectations.

Nvidia (NVDA -3.12%) is currently the clear leader in the AI chip industry. The company has seen impressive growth in its revenue and profits, and many investors believe there is still more growth to come, which is why they continue to buy the stock, even with its high prices.

A smaller starting point enables AMD to have a better estimated EPS growth rate over the next five years while being valued more favorably. With its AI-centered processors and new GPU launches at CES 2025, AMD is in a strong position to compete with Nvidia and could gain market share. I believe that AI PCs will significantly enhance AMD's performance this year.