AI Chip Race: Nvidia and AMD Impress with Optimistic Forecasts

The discussion about the durability of the artificial intelligence (AI) boom continues to gain momentum. Nvidia, with an impressive price-to-earnings ratio of 34, and the challenger Advanced Micro Devices (AMD), with 30, offer investors plenty of excitement. Despite ongoing debates about the sustainability of this growth, the leaders of the AI chip industry appear confident and unfazed. Elliott Management, a gigantic hedge fund, recently expressed concerns, labeling the AI sector as overvalued and potentially unprofitable. Nevertheless, major technology companies, supported by statements from Oracle Chairman Larry Ellison, seem firmly convinced of the continued relevance and development of AI. Last week, both Nvidia and AMD made significant announcements. The Nvidia CEO emphasized the extraordinarily high demand for the new Blackwell chip, while Morgan Stanley confirmed that it is already sold out for the entire coming year. Simultaneously, AMD unveiled its new EPYC 9005 CPUs and Instinct MI325X GPUs and raised the growth forecast for the AI accelerator market to $500 billion by 2028. Given the current environment, comparing it to the dot-com era may be inappropriate, as many of today's investors and major AI chip buyers have strong financial reserves. The recent stock price developments among major tech stocks and the less speculative valuations reinforce this impression. A boom always carries the risk of a bubble, but at this point, the growth of the AI sector seems sustainable and promising. Those looking to invest in this future-oriented market should keep risk aspects in mind, but also not miss out on the opportunities.