I love AMD, but my Nvidia stock position currently is much higher than AMD.
This topic is just about wether this changes or not
AMD is at a much higher PE ratio. Is the market expecting AMD to up its game in the GPU sector? Or is the market expecting a pullback in GPU demand due to possibility for non-GPU AI solutions becoming the frontier or for AI investment to slow down?
Why not both?
I think that the expectation is that NVIDIA is in somewhat of an unreasonable position right now (and for the immediate future) where they're getting about 80% gross margins on their datacenter GPUs. This is an extremely juicy target for competitors, and even if competitors manage to produce a product that's half as good as NVIDIA, NVIDIA will have to cut prices to compete.
AMD doesn't have a higher PE ratio. You should use nonGAAP numbers because the GAAP numbers include Xilinx Googwill Amortization which skew the PE.