Wolfe analysts now favour AMD stock over Nvidia: here’s why

Analysts at Wolfe Research just replaced Nvidia Corp NVDA with Advanced Micro Devices Inc AMD on their list of top stocks for 2024. 

Why is AMD a better pick than Nvidia stock?

The “tactical shift”, the investment firm told clients in a research note today, is based on “the relative move in stock prices YTD”. 

AMD stock is down more than 20% versus its year-to-date high while $NVDA is up close to 100% at writing. 

Wolfe replaced Nvidia stock also because they no longer expect Jensen Huang to deliver an exceptional beat in Q1 on May 22nd. 

Consensus is for the semiconductor behemoth to earn $5.17 a share in its first quarter versus 88 cents per share only a year ago. Earlier this week, China asked its tech companies to buy less of Nvidia chips as Invezz reported here.

What else could benefit AMD stock in 2024?

Analysts at the investment firm now favour AMD stock also because it has resolved its memory issues. 

They expect the MI300 accelerator of Advanced Micro Devices to hit $2.0 billion in revenue run rate by the end of 2024 and remain positive on “upward AI revenue guidance revisions through 2H24 as demand visibility improves”. 

Expected recovery in server/client CPUs in the back half of this year will also serve as a meaningful catalyst for $AMD, as per Wolfe Research. 

The bullish call on the $260 billion giant based out of Santa Clara, California arrives shortly after it came in ahead of Street estimates for its first financial quarter and issued in-line guidance for the future.