Better Artificial Intelligence Stock: AMD vs. Marvell Technology


Advanced Micro Devices (NASDAQ: AMD) and Marvell Technology (NASDAQ: MRVL) have enjoyed contrasting fortunes on the stock market in 2024, with one of these names delivering stellar gains while the other one is in the red.

More specifically, AMD stock’s decline of 13% this year pales in comparison to the impressive 76% surge in Marvell’s shares. Both companies are benefiting from the growing demand for chips to power artificial intelligence (AI). So, will Marvell remain the better AI stock of the two in 2025 as well? Or can AMD turn its fortunes around in the new year and outperform Marvell?

Let’s find out.

AMD has been playing second fiddle to Nvidia in the market for AI data center graphics processing units (GPUs). Even so, the company’s data center business has been growing at an impressive pace.

In the third quarter of 2024, for instance, AMD’s data center revenue increased 122% year over year to a record $3.5 billion.

Management says that this impressive growth was driven by the strong demand for its data center GPUs and CPUs (central processing units). The company now expects to finish the year with $5 billion in data center GPU revenue, which would be a massive improvement from the $400 million revenue it generated from sales of these chips in the fourth quarter of 2023.

Moreover, the company has kept increasing its data center GPU guidance throughout the year, starting from $2 billion at the beginning of the year.

AMD is finding success in other related niches as well, such as AI-enabled personal computers (PCs). This explains why the company’s revenue from its client segment, which includes sales of CPUs used in desktops and notebooks, increased by an impressive 29% year over year in the third quarter to $1.9 billion. These two segments together produced 80% of AMD’s third-quarter top line, and their solid growth allowed the company to offset the weakness in other areas such as gaming and embedded chips.

The company’s overall revenue increased by 18% from the year-ago quarter to $6.8 billion, while adjusted earnings were up by 31% to $0.92 per share. AMD’s guidance for the current quarter is also solid. The company expects its year-over-year top-line growth to accelerate to 22% in the fourth quarter. Analysts forecast AMD to exit 2024 with a 13% increase in revenue to $25.6 billion, along with a 25% jump in earnings to $3.32 per share.

The next year, however, is going to be much stronger for AMD as per consensus expectations. Its revenue is expected to jump nearly 27%, while earnings are forecast to increase by 54%.



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