AMD Just Joined Nvidia in the $1 Trillion Club. At $614, Wall Street Is Paying Too Much for a Distant No. 2. – AOL

Key Points

• AMD stock is up 187% so far this year, handily outperforming Nvidia.

• While AMD has signed landmark deals with artificial intelligence (AI) hyperscalers, the company’s data center business pales in comparison to Nvidia.

• AMD is a much more expensive stock than Nvidia based on earnings multiples.

The trillion-dollar club just ushered in its newest member. As of midday trading on Sept. 23, Advanced Micro Devices(NASDAQ: AMD) boasts a market cap of $1 trillion. AMD now joins Nvidia(NASDAQ: NVDA), Taiwan Semiconductor Manufacturing, Broadcom, Samsung, and Micron Technology as the semiconductor stocks with a trillion-dollar valuation.

This is the kind of milestone that makes some people stop thinking and start buying blindly. Here’s the thing: AMD is not Nvidia. It is the distant No. 2 in the artificial intelligence (AI) accelerator market, and at its current price point, Wall Street is paying a premium as if the gap is about to vanish. Let me explain why it’s not.

Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »

AMD’s journey to a trillion-dollar valuation

When Lisa Su became CEO of AMD on Oct. 8, 2014, the company was a turnaround project. At the time, AMD was worth about $2 billion, and shares looked like they were headed toward penny-stock status. Fast-forward to…