Daily Stock Pick for October 18, 2023

The AI hype may have died down somewhat – but we all know who’s still the king of AI stocks…

It’s Nvidia, a stock which, while still affected by the market pullback, is still within 15% of all-time highs.

It’s an incredibly expensive stock that could still be a good bet for those looking for longer-term gains.

But if you want a stock that’s “almost” as good as Nvidia…

That has an over 35% expected upside based on median analyst estimates…

And has just made an acquisition that could pose a serious challenge to Nvidia’s AI dominance…

Advanced Micro Devices, Inc. (AMD)

Semiconductor powerhouse AMD should not be an unfamiliar name to most. But while its stock has definitely benefited from the AI boom – having risen 67% this year – it pales in comparison to Nvidia’s 220% gain.

One reason commonly overlooked when it comes to Nvidia’s dominance in the generative AI space is not its hardware – but its software. Nvidia bundles its GPUs with services that allow these Large-Language Models to be trained, creating a “full stack” offering that also gives it a strong competitive moat.

AMD recognizes this, which is why last week, it announced it was acquiring Nod.ai – an AI software startup. Nod’s technology helps generative AI models be deployed more efficiently and effectively – and should help AMD bridge at least some of Nvidia’s competitive moat.

Beyond that, most analysts think AMD’s stock still has substantial upside, with their median price target of $145 being over 35% higher than its current price.

Combine this with the Nod.ai acquisition – the implications of which has yet to fully sink into the market – and you could have a recipe for a surging semiconductor stock that could challenge Nvidia for the throne.

To your wealth,
Felix @ Ace of Investing