This year will be interesting for the chip space. Investors and Wall Street analysts will weigh every possible statistic around Nvidia’s new Blackwell GPU, which is already out for the next 12 months. This is good news for Nvidia on the surface, but I think AMD has a big opportunity on the back end.

That said, these supply and demand dynamics provide an interesting opening for AMD, as the company can compete on price and offer an optimal solution when businesses simply can’t get their hands on Nvidia GPUs. It is also not reasonable to accept this idea.

A major headwind for AMD over the past year has been the notable adoption of its MI300 accelerators by hyperscalers, including Oracle, Microsofti Metaplatforms. While each of these companies also relies heavily on Nvidia’s GPU architecture, they have made moves to diversify their AI infrastructure by supplementing their respective Nvidia stack with products developed by AMD.

When you consider that AMD already has a line of successor chips scheduled for release in 2025 and 2026, I think the company has a good chance of capitalizing on the continued demand shaking up the semiconductor landscape by offering a number of alternative solutions . in Nvidia’s suite of products, all at a more reasonable price.

For me, investors should be laser-focused on the growth trends around AMD’s data center GPU segment. If the company can continue to accelerate this specific part of its business profitably, then I think it’s only a matter of time before investors start to take note of its scale and the stock can start to explode.

I see AMD as an attractive long-term opportunity for AI investors and think the ongoing depressed price action makes now a lucrative time to buy the stock.

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* Stock Advisor returns from January 13, 2025

Randi Zuckerberg, former CMO and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Meta Platforms, Microsoft and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, Oracle and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has one disclosure policy.

This artificial intelligence (AI) stock is an absolute bargain right now and could skyrocket by 2025 was originally published by The Motley Fool