nvidia (NASDAQ: NVDA) It was one of the best performing stocks in 2024, earning an incredible 171% profit. The advantage was driven by the rising demand for data center graphics processing units (GPUs), the gold standard for developing artificial intelligence.
However, AI hardware races get hotter and some of Nvidia’s companions, including advanced microdevice (AMD) 0.75%)) and Micron Technology (mu) 4.82%)) It could also be a great purchase. These companies have recently provided record financial results behind AI chip sales, but their stocks have fallen sharply from their 52-week highs.
AMD and Micron are beginning to look like very good value, so here are the reasons why investors want to buy both in 2025:
Image source: Getty Images.
For advanced microdevice
AMD is the world of Consumer Electronics, as everything from Tesla’s electric vehicle infotainment systems to Microsoft’s Xbox gaming consoles powers everything. However, the company stepped up to compete with Nvidia in its data centers by launching its own range of AI GPUs starting with the MI300X in the second half of 2023.
The MI300X has competed in the market more than a year after NVIDIA’s H100, but has gained many top AI customers including Microsoft, Oracle and Meta platforms. AMD increased the pace of innovation and last year unveiled a new GPU architecture called Compute DNA (cDNA) 4 to compete with Nvidia’s industry-leading Blackwell architecture.
Upcoming cDNA 4-based GPUs like the MI350 will deliver 35x the performance of cDNA 3 variants like the MI300, hosting how developers can deploy the most advanced AI models ever. AMD originally planned to start shipping the MI350 in the second half of 2025, but will send samples to customers this quarter much earlier than planned.
AI models are becoming more efficient, with personal computers (PCs), smartphones and other devices packing enough computing power to run locally right away, reducing their reliance on external data centers. AMD’s Ryzen AI 300 series is the best AI chip in the industry for PCS, and the company expects more than 100 commercial platforms to use them in 2025 from top manufacturers such as HP, Microsoft and Lenovo.
AMD recently reported its financial results for 2024, generating a record $12.6 billion of data center revenue, up 94% from 2023. Revenue from the client segment, home to Ryzen AI PC chips, rose 52% to $7 billion.
As a result, AMD stocks are beginning to appear to be of great value. Last year, the shares traded at a price-to-earnings (P/E) ratio of 32.6 based on the company’s $3.31 adjusted earnings per share (EPS) of $3.31 last year.
Wall Street expects AMD to bring revenue growth of 43% in 2025 (according to Yahoo!), so its inventory looks even cheaper. That’s the important reason I think it could be a great purchase this year.
With Micron Technology
Micron is a leading supplier of memory chips for a variety of applications, including data centers that complement GPUs with AI workloads. Memory stores information in a prepared state. This speeds up processing time by allowing the GPU to call training and inference settings immediately. Micron’s HBM3E (High Bandwidth Memory) solution is the best in the industry, with 50% more capacity increasing while consuming 30% less energy than its competitors.
Nvidia has chosen Micron’s HBM3E hardware to bolster its new Blackwell GB200 GPU, the most advanced AI chip currently on the market. Demand is so strong that Micron’s data center memory solutions are sold out until 2026, and it is unlikely that it will slow down. The company expects the addressable market for this segment to grow to $100 billion a year by 2030. This is a big jump from today’s $16 billion worth.
As a result, Micron is already working on a new HBM4E solution, and is expected to deliver 50% performance from the current generation.
Micron generated $8.7 billion in revenue during the first quarter of 2025 (ends November 28th). This is an 84% increase from the same period last year. Datacenter revenues, especially up 400%, accounting for half of the company’s total revenues for the first time.
But, as with AMD, Micron’s AI opportunities are much greater than in data centers. The company says new PCs equipped with AI processors require 16 gigabytes and 24 gigabytes of DRAM (memory) capacity, which is on average rising from 12 gigabytes last year. There is a similar change in the smartphone industry, with several manufacturers recently unveiling Android-powered devices with up to 16 gigabytes of memory to handle AIN workloads. These consumer segments could be a major source of growth for microns in the future.
Wall Street consensus forecast (provided by Yahoo!) suggests that Micron can offer $6.89 in EPS during fiscal year 2025, placing inventory at a forward P/E ratio of just 13.8. This is a sudden discount on both Nvidia and AMD forward P/ES.
NVDA PE ratio (forward) data by YCHARTS
So, given Micron’s incredible growth, its inventory may be one of the biggest bargains in the AI chip space right now.
Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool’s board of directors. Anthony di Pizio does not occupy any of the stocks mentioned. Motley Fool recommends and recommends advanced microdevice, HP, meta platform, Microsoft, Nvidia, Oracle, and Tesla. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
