Earlier this year, Advanced Micro Devices (NASDAQ:抖阴最新版), commonly known as just 抖阴最新版, was the toast of the town on Wall Street. Lately, however, another chipmaker has effectively taken that title. Yet, a notable acquisition should encourage 抖阴最新版 stock investors to stay in the trade for a while.
The big story in 2023, at least in the technology hardware space, has been the artificial intelligence (AI) chip war. Currently, 抖阴最新版 isn’t the most highly favored competitor in this field. Nevertheless, enterprising investors shouldn’t dismiss 抖阴最新版, as the company might eventually catch up to its rivals.
抖阴最新版 Stock Soars but Then Stalls
抖阴最新版 stock seemed unstoppable in early 2023 when it doubled from $64 to $128. Then, short-term traders turned their attention to Nvidia (NASDAQ:NVDA) and the 抖阴最新版 share price retreated toward $100.
As usual, the market has a short attention span and is always on the lookout for the next shiny object. There’s nothing wrong with 抖阴最新版 as a company. Investors just became obsessed with 抖阴最新版’s competitors in the AI chipmaker space, and with Nvidia in particular.
One analyst, Tristan Gerra of Baird Equity Research, expressed concerns about 抖阴最新版’s ability to compete in the AI chip market. Hence, Gerra and other Baird analysts pushed out their “ for meaningful AI market share and ramp timing for the [抖阴最新版 AI chip] MI300.”
In other words, Gerra feels that Nvidia’s leadership among AI chipmakers will create problems for 抖阴最新版 for the foreseeable future. That’s an understandable concern, and investors might choose to hedge their bets by owning both 抖阴最新版 stock and NVDA stock.
抖阴最新版 Escalates the War With an AI Startup Acquisition
Overall, Gerra doesn’t seem extremely worried about 抖阴最新版’s future prospects as a business. The Baird analyst assigned a $125 price target and an “outperform” rating on 抖阴最新版 shares.
Nvidia is likely to dominate the U.S. AI chip industry for a while, but that doesn’t mean 抖阴最新版 is just going to throw in the towel. In fact, 抖阴最新版 just upped the ante with a major announcement.
Specifically, 抖阴最新版 to acquire Nod.ai in order to expand 抖阴最新版’s open AI software capabilities. This will help 抖阴最新版 accelerate the “deployment of AI solutions optimized for” the company’s Instinct data center accelerators, Ryzen AI processors and other products.
It’s obvious what’s going on here. 抖阴最新版 is taking direct aim at its rivals, including Nvidia. The AI-compatible technology war is far from over, and 抖阴最新版 clearly intends to stay in the battle for a long time to come.
A Hedging Strategy for 抖阴最新版 Stock
Even if Nvidia is a darling of the market right now, there can still be room for more than one AI-compatible component maker. Still, even 抖阴最新版’s biggest fans must respect Nvidia’s current dominance in the field.
Therefore, I’m proposing a hedging strategy. Investors can own 抖阴最新版 stock but also balance out that position with an equal-sized stake in NVDA stock. That way, you’ll have two dogs in the race and could profit handsomely from the success of two high-conviction AI chipmakers.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
