Is Nvidia (NVDA) no longer the undisputed market leader among artificial intelligence (AI) stocks?
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The prominent Magnificent 7 stock kicked off this trading week on a low note, showing signs that it had fallen into a slump. This prompted speculation that AI spending could either decline or shift toward Nvidia’s competitors. However, NVDA stock has since reversed course and is currently displaying momentum and is currently on an upward trajectory.
Despite Nvidia’s recent declines, many Wall Street analysts remain highly bullish. But that doesn’t mean that experts aren’t starting to look toward other AI stocks for exposure to the booming industry.
Other chip makers and leading tech companies are trying hard to secure a piece of the lucrative market, and some experts are noticing. In fact, one hedge fund president is highly bullish on one of Nvidia’s chief competitors.
With Nvidia consistently in complete focus, even when shares are slumping, some may find it hard to consider an AI sector in which it isn’t the dominant leader.
But with competition for its place as the leading chipmaker consistently increasing, some experts are shifting focus to other companies that threaten Nvidia’s market share.
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David Tepper, founder of prominent hedge fund Appaloosa Management, seems to view Advanced Micro Devices (AMD) as a likely Nvidia challenger. According to data cited by Insider Monkey, his fund holds a $186.23 million stake in the rival chipmaker, which has been trending downward lately.
Given their similar chips, it makes sense that AMD would be considered a likely Nvidia challenger.
Both companies produce graphics processing units (GPUs), powerful AI chips that, due to their parallel processing abilities, power large language models (LLMs) and perform other machine learning tasks.
While AMD is better known for producing general-purpose central processing units (CPUs), Nvidia reentered this field in 2021 with the introduction of the Nvidia Grace processor after being mostly focused on GPUs.
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CPUs are often used in powering data centers, a niche that has helped AMD build a list of clients, including Meta Platforms (META) , Google (GOOGL) , and Microsoft (MSFT) .
“Advanced Micro Devices [] is already recording strong demand for its data center chips, Insider Monkey reports. “Meta Platforms acquired 1.5 million units of its EPYC computer processor, contributing to a 122% increase in data center segment revenue in the third quarter. The unit now accounts for about half of the company’s total revenues.”
