This Nvidia Rival is More Expensive Than Nvidia. Is it Worth the Price? | The Motley Fool

As the artificial intelligence (AI) story unfolds, Nvidia (NVDA +1.20%) has so far been the leading character. This is because the company makes the key tool that’s spurred all of the action: AI chips. Nvidia’s graphics processing units (GPUs) fuel critical tasks like the training of AI models so that they later can go on to work for us.

Nvidia’s leadership in the AI chip market and its development of an entire suite of related products and services have helped the company generate record revenue in recent years, with its latest annual sales figure coming in at $130 billion, and the stock price has soared. Over the past three years, Nvidia shares have climbed more than 900%.

But Nvidia isn’t alone in the AI chip market, and a certain rival has made significant progress in recent years. I’m talking about Advanced Micro Devices (AMD +0.34%). The company has put the focus on serving AI, and like Nvidia, has seen its revenue and stock price take off. In fact, right now, AMD actually is more expensive than Nvidia as it trades at a higher valuation. Is it worth the price? Let’s find out.

First to market

Nvidia was first to market with its GPUs for AI, and that has helped it build leadership. But in recent years, AMD has prioritized the development of accelerators for AI, and its work is bearing fruit. The company introduced its Instinct GPUs for data centers in late 2016 and has…