Nvidia is a poster child for accelerating AI adoption, but one rival could surpass its revenue by 2030.
If there’s one company that embodies the opportunity presented by the accelerating adoption of artificial intelligence (AI), it’s certainly Nvidia (NVDA 0.69%).
The company’s graphics processing units (GPUs) were already the gold standard for processing early versions of AI, even before generative AI emerged early last year. These advancements required much more computational power than their predecessors, but Nvidia answered the call and quickly became the go-to company for running cutting-edge AI performance.
The result has been a breathtaking rise in stock prices: Nvidia is up 147% in the past year and 478% in the past three (as of this writing). One Wall Street analyst thinks Nvidia’s stock has more to offer, predicting that the stock could rise another 259% by 2030. But that same analyst thinks rival Advanced Micro Devices (AMD – 1.21%) has even more upside potential.
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Historical background
Beth Kindig, chief technology analyst and CEO of I/O Fund, has an impressive track record of writing about Nvidia. In 2018, she argued that Nvidia has an “unbreakable moat” due to the “performance and efficiency” of its cloud GPUs, giving the company a commanding lead in “next-generation AI applications.” Kindig further suggested that developer adoption of Nvidia’s platform will be key to the company’s future success.
In the years since, Kindig’s prediction has proven to be remarkably accurate. Moreover, Nvidia’s consistent focus on research and development (R&D) has led to far-reaching performance advantages over its competitors, something Kindig predicted.
Given Kindig’s track record, Wall Street listens when he talks about Nvidia. Last month, Nvidia’s market cap hit $3.3 trillion, briefly becoming the world’s most valuable company, surpassing Microsoft and Apple, but it has since fallen off the rails. Kindig thinks Nvidia’s stock has more to gain, predicting that its market cap could reach $10 trillion by 2030, an additional 259% increase compared to Thursday’s closing price. But perhaps more attention-grabbing is his view that Advanced Micro Devices (AMD) could make even more impressive gains over the same period.
Changing of the Guard
So far, widespread adoption of AI has been focused on training AI systems like ChatGPT. But this is only the first step: these models then need to be deployed to complete the tasks they were trained for, a process called inference.
Kindig argues that as the focus shifts from training to inference, opportunities and competition will increase. Currently, Nvidia controls about 98% of the AI training market, giving rivals little chance. But much of the AI processing is expected to eventually move from the cloud to the device itself, which could increase competition.
Nvidia owes much of its current success to its Compute Unified Device Architecture (CUDA), a proprietary software platform that developers use to maximize the performance of its GPUs. The inference market will likely become less dependent on CUDA, creating an opportunity for AMD to shine.
AMD has long been one step behind Nvidia, but its processors are comparable in many ways. AMD’s biggest advantage is price, as it offers similarly specced processors for significantly less. As AI adoption accelerates, AMD may have the means to “chip away” Nvidia’s advantage.
Nvidia’s H100 AI processors reportedly have a top price of $40,000, more than double the price of AMD’s MI300X. Savings of $20,000 per unit add up quickly, creating a money-saving opportunity for anyone willing to invest heavily in AI. That’s where AMD’s opportunity lies.
Accelerate your growth with discounted prices
No one knows how big the opportunity for AI will ultimately be, but estimates for the adoption of generative AI continue to rise. According to global management consulting firm McKinsey & Company, conservative estimates suggest the market could grow to between $2.6 trillion and $4.4 trillion per year.
Given the size of the opportunity, there is certainly room for multiple winners in the AI space, and even small gains in market share could translate into big gains for AMD investors. What’s more, the company’s shares currently trade at less than seven times next year’s expected sales, while Nvidia’s price-to-sales multiple (P/S) is over 17 times, making AMD’s stock much more attractive.
Kindig’s track record with Nvidia stock will no doubt work in her favor, so for investors looking for another way to profit from the AI revolution, AMD stock could be a great opportunity at a more attractive price.
Danny Vena invests in Apple, Microsoft, and Nvidia. The Motley Fool invests in and recommends Advanced Micro Devices, Apple, Microsoft, and Nvidia. The Motley Fool recommends buying Microsoft January 2026 $395 calls and selling Microsoft January 2026 $405 calls. The Motley Fool has a disclosure policy.
