On Thursday, Advanced Micro Devices (AMD) surpassed $300.00 billion in valuation after Nvidia (NVDA) stock soared, sparking AI optimism.
The Silicon Valley tech company’s stock jumped 9.06% to $192.53 per share on February 29. Moreover, industry watchers predict a 1.93% gain to $196.25 apiece in the coming market session.
As a result, it closed the day with $311.09 billion in market capital, becoming the 22nd largest S&P 500 company. In January, AMD CEO Lisa Su expressed confidence that Instinct MI300X will help narrow the gap with Nvidia, ranked third in the S&P 500.
Stock prices of advanced AI chip developers climbed after analysts increased their price target for Nvidia from $790.00 to $985.00. The 24.68% upward revision for the industry leader boosted confidence in the strong adoption of next-gen GPUs, including AMD’s Instinct series.
AMD expects fourth-quarter non-GAAP earnings per share of $0.61 for 1.67% year-over-year (YoY) growth from $0.60 in Q1 2023. Similarly, the company anticipates a 0.88% YoY increase in Q4 revenue to $5.45 billion from $5.40 billion a year prior.
Shares of Nvidia’s top competitor advanced 140.00% over the past year, but not on performance but on future expectations. AMD stock trades at almost 50 times estimated earnings, far more expensive than the 32 times multiplier of NVDA shares.
Nvidia Surge Boosts AMD and Other AI Chipmakers
Nvidia shares touched the $800.00 resistance level on Thursday, supporting AMD and other competitors in the advanced AI chip market. However, the California-headquartered tech company failed to hold onto its gains and eventually settled 1.87% higher at $791.12 per share.
NVDA has a near-monopoly of the graphics processing unit (GPU) industry, controlling over 82.00% of the market in 2023. Hence, any major developments in the Delaware-incorporated company can considerably impact the overall tech industry.
In its fourth-quarter earnings report for the fiscal year 2024, Nvidia posted a 765.00% YoY earnings per share increase. Its performance improved the market sentiment regarding demand growth in advanced AI chips and high-end GPUs.
NVDA’s Q4 earnings beat bolstered investor confidence in its competitors, especially AMD, which owns 10.00% of the global GPU market.
