The chip industry is going to be the most hyped and important industry over the coming decade. Both of these companies are almost certainly going to do well and rake in cash. Let’s say for the sake of this argument, however, that you could only pick one to buy. Now, before I start going into these companies, I should mention that I have no clue about anything computer. I play video games on an Xbox and I’m typing this on a Mac. I don’t even know what chip is in this, so if you’re looking for technical analysis of the chips you should look elsewhere because I’m not your man.

Nvidia (NVDA) has been a rocket this year, up 238% YTD, it’s entirely out of control. If you’re buying to hold for the next decade it probably doesn’t matter, but any time less than that and I’d be a little worried about buying so rich. A p/e of 117 is just ridiculous, I think the S&P P/E ratio is 23. NVDA has been loved by investors this year because they have captured the AI market. I feel like you’re buying the peak, there is no room for them to gain more in AI. Their image is that they practically own AI chip sales. I could see a major selloff for them, maybe falling to $320, but that’s a little aggressive. Either way, I think they are way overvalued. The only direction it feels they can go is down. I also think they’re going to lose their prized AI market share to AMD. Their market share comes from their excellent GPUs. They currently have an estimated market share of 90%. There is no direction but down, especially with competitors inevitably undercutting or producing comparable-quality GPUs. Outside of AI, it feels like it could go either way, but it would be easier to make the case that NVDA is the top dog.

AMD is perenially innovating. It’s sort of their calling card, and anytime I hear something like that about a company, my ears immediately perk up. I also am a big fan of their CEO Lisa Su. As I always say, leadership is the most important part of any company, and she seems extremely dynamic. Anytime I see her on TV, she seems charismatic, intelligent, and experienced. CNBC appearances aren’t what you’re making investment decisions on, however. AMD’s chips and GPUs are generally recognized as being slightly below Nvidia’s in quality, but they’re in more industries. Some analysts have said that they would prefer it if AMD would focus a little more, but I disagree. I think they’ve done a great job so far of managing their many interests, and I trust in their leadership. I keep talking about their leadership because if you go through their executive list, they’re just winners. That’s why I think AMD will be successful in taking market share from NVDA and I think they will become equals. Them being equals would be great because NVDA’s price is wildly inflated compared to AMD.

My final verdict is already pretty clear. AMD seem like winners, not to say NVDA isn’t, I actually think they’re pretty similar, but AMD is about half the value right now. You’re buying the peak with NVDA, you’re buying the ascent with AMD. Not to overhype it, AMD’s up 78% YTD, but if you’re getting into chips, I’d go with AMD.