Advanced Micro Devices (AMD -0.88%) is gearing up for a major moment this June. The company is expected to unveil its newest artificial intelligence (AI) chip during a special event, and investors are watching closely. This could be a big step for AMD as it aims to compete with Nvidia in the fast-growing AI chip market.

AMD’s New AI Chip, What’s Next?

AMD is likely to announce its new AI chip, which many expect to be part of its Instinct MI300 series. These chips are designed to power large-scale AI tasks like training language models (like ChatGPT), powering data centers, and running cloud services. This event could help AMD close the gap with Nvidia, which currently leads the AI hardware market with chips like the H100.

Why This Launch Could Be a Turning Point for AMD

Worldwide semiconductor revenue reached $655.9 billion in 2024, marking a 21% increase from $542.1 billion in 2023, according to final figures from Gartner, Inc. NVIDIA surged to the top position, surpassing Samsung Electronics and Intel for the first time.

Gaurav Gupta, VP Analyst at Gartner Said

“The position shift among the top 10 semiconductor vendor revenue ranking is due to large demand for AI infrastructure buildout and an increase of 73.4% in memory revenue,” “ NVIDIA moved to the No. 1 spot as a result of a marked increase in demand for its discrete graphic processing units (GPUs) that served as the primary choice for AI workloads in data centers.”.

Should You Invest $1,000 in AMD Right Now?

Before you invest in AMD, there’s something to think about. The team at Motley Fool Stock Advisor recently picked what they believe are the “10 best stocks” to buy right now. AMD was not on that list. They believe the stocks they chose could deliver huge returns in the coming years.

Here’s some history to show why their picks matter:

  • On December 17, 2004, they recommended Netflix. If you had invested $1,000 back then, today you’d have “$524,747”.
  • On April 15, 2005, they picked Nvidia. That same $1,000 investment would now be worth $622,041.

The average return from Stock Advisor is 792%, which beats the 153% return of the S&P 500 by a wide margin. But it depends on your investing goals. If you’re a long-term investor, this could be an interesting time to watch AMD. A successful AI chip launch could help the stock grow in the future. But keep in mind: AMD’s performance also depends on factors like supply chains, customer adoption, and global tech spending.

What Are Analysts Saying?

Industry forecasts predict that the generative AI market will grow significantly, from $40 billion in 2022 to an impressive $1.3 trillion by 2032. Additionally, Thomson Reuters highlighted AI’s potential to boost productivity, estimating that professionals could save up to 12 hours per week by 2029 thanks to AI-driven automation. As AI continues to advance, its impact is spreading across various sectors, including finance and healthcare, making it a key consideration in investment strategies.

What About The Motley Fool’s View?

According to The Motley Fool, AMD didn’t make their list of top 10 stocks to buy right now. They suggest looking at other companies they believe have more growth potential. For example, when Netflix was recommended in 2004, a $1,000 investment would be worth $524,747 today. And Nvidia? A $1,000 investment from 2005 would be worth $622,041. Still, this doesn’t mean AMD isn’t a solid company just that it may not be the very best buy at this exact moment, according to their team.