Ditch AMD and just go with Nvidia

Advanced Micro Devices (AMD) shares are falling after the chipmaker reported third-quarter results and its fourth-quarter outlook failed to impress investors. The AMD selloff triggered a decline in Nvidia shares as weaker-than-expected guidance fueled some concerns about demand for artificial intelligence (AI) chips. Paul Meeks, CIO of Harvest Portfolio Management and Wall Street Beats partner, explains the results and what they mean for the company and the AI ​​space to Morning Brief hosts Seana Smith and Brad Smith.

Meeks says: “I have a third of my portfolio with Nvidia. It was a rock star. I don't think what AMD said yesterday will put Nvidia in danger with the big move that Nvidia has already experienced [and] The fact that it's only down 1% today because of AMD's sins I actually think is a pretty good sign.”

He adds: “The problem [with AMD] is not a pure AI accelerator chip. There's also a CPU business, and that business is pretty shitty right now. And here's how I see it: Even if AMD will be a viable number two for Nvidia in the AI ​​chip market and the stock trades at a discount compared to Nvidia, I'll just stick with the pure strategy. I'm just buying more Nvidia based on this news and continuing to avoid AMD, which was a good trade for me.”

For more expert insights and analysis on the latest market activity, read the Morning Brief here.

This post was written by Naomi Buchanan.