F.L. Putnam Strategist Recommends Investing in This Global Chipmaker Instead of Nvidia Amid Rising AI Competition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 09 2025
0mins
Should l Buy AMD?
Source: CNBC
Investment Strategy: Ellen Hazen from F.L. Putnam Investment Management suggests that investors can benefit from the AI rally by focusing on Taiwan Semiconductor Manufacturing Company (TSMC), which has a strong position in the semiconductor market and is less vulnerable to debt financing issues.
Market Outlook: Hazen acknowledges the potential for a bubble in AI investments but believes it won't reach the scale of past tech bubbles, citing strong earnings growth as a stabilizing factor for tech valuations.
TSMC's Performance: TSMC has seen significant growth, with a 52% increase in stock value this year, driven by high demand for AI and high-performance computing, which accounted for 57% of its revenue in the third quarter.
Nvidia's Challenges: While Hazen remains optimistic about Nvidia, she expresses caution regarding its future sales in China, highlighting uncertainties about demand and the impact of geopolitical factors on its revenue growth.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise
33 Analyst Rating
25 Buy
8 Hold
0 Sell
Strong Buy
Current: 205.940
Low
210.00
Averages
289.13
High
377.00
Current: 205.940
Low
210.00
Averages
289.13
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing, graphics and visualization technologies. Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes artificial intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), smart network interface Cards (SmartNICs) and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Record Epyc CPU Sales: AMD achieved record sales of Epyc CPUs in Q4, fueled by the adoption of the fifth-generation Epyc
See More
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- Market Value Surge: Since the end of 2022, Nvidia has added nearly $4.2 trillion in market cap, becoming the most valuable company on Wall Street, reflecting its dominant position and market confidence in the AI sector.
- Strong Sales Expectations: Analysts anticipate Nvidia will achieve approximately $65.6 billion in sales for fiscal Q4 2026, a 67% year-over-year increase, indicating robust demand for its AI hardware despite high investor expectations.
- Sustained Competitive Advantage: Nvidia's GPUs face virtually no competition in AI-accelerated data centers, with CEO Jensen Huang aggressively investing in R&D to maintain compute superiority, planning to introduce advanced GPUs annually.
- Pricing Power Challenges: As GPU supply improves, Nvidia's pricing power may weaken; although its GAAP gross margin remains above 70%, future sales growth could be impacted by internal competition and market dynamics.
See More
AMD and TCS Expand Strategic Partnership to Launch AI Architecture in India
- Strategic Partnership Expansion: AMD and TCS have broadened their collaboration to introduce the 'Helios' rack-scale AI architecture, aiming to enhance competitiveness against Nvidia in India's rapidly growing tech market, which is expected to drive widespread AI adoption.
- Data Center Blueprint: The companies will offer an AI-ready data center blueprint supporting up to 200 MW of capacity, planning to collaborate with hyperscalers and AI firms to accelerate data center build-outs in India, addressing the increasing demand for computing resources.
- Infrastructure Co-Development: TCS, through its subsidiary HyperVault, will co-develop an AI infrastructure design based on the 'Helios' platform to support India's national AI initiatives, aiming to provide scalable AI deployment solutions for enterprises.
- Market Share Growth: According to Arista Networks, AMD's share in the AI chip market is rising, with approximately 20% to 25% of recent chip deployments opting for AMD, while Nvidia is projected to dominate with 99% of the market by 2025, indicating AMD's competitive potential.
See More
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- Surging AI Revenue: Broadcom reported a 74% year-over-year increase in AI semiconductor revenue for the latest quarter, with projections indicating that first-quarter revenue will double to $8.2 billion, driven by strong demand for custom accelerators and AI Ethernet switches, significantly boosting overall performance.
- Record Backlog: The company's backlog for AI switches has surpassed $10 billion, reflecting robust market demand amid ongoing AI data center buildouts, which further solidifies Broadcom's position in the industry.
- Differentiated Product Offering: Broadcom has launched the industry's first Wi-Fi 8 access point and switch system, designed to enhance security and speed for enterprises utilizing AI, thereby increasing its competitive edge and attracting more customers.
- Unique Market Positioning: Broadcom's XPUs are custom chips tailored for specific purposes, differentiating them from Nvidia and AMD's general-purpose GPUs, allowing the company to carve out a niche in the competitive AI market and enhancing its strategic positioning for future growth.
See More
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- Palantir's High Valuation: Despite a significant stock pullback this year, Palantir's valuation remains astronomical at 128 times forward earnings, which may lead to declining investor confidence in its future growth prospects.
- Optimistic Outlook for Nvidia: Nvidia's forward earnings multiple stands at 24.5, and with the upcoming launch of the Rubin platform, which will support inference at up to 10 times lower costs, the company is expected to continue its growth trajectory and solidify its leadership in the AI chip market.
- AMD's Competitive Edge: Although AMD trades at nearly 32 times forward earnings, its Instinct MI400 chips match Nvidia's Vera Rubin in compute performance and memory bandwidth while offering 1.5 times the memory capacity and scale-out bandwidth, showcasing its potential as a credible challenger to Nvidia.
- Sustained Market Demand: Both Nvidia and AMD are poised to benefit from ongoing GPU demand, while Palantir's excellent product may not justify its high stock price, potentially hindering its ability to deliver market-beating returns.
See More
TSMC on Track to Join $3 Trillion Club
- Market Position Solidified: TSMC's current market capitalization stands at $1.9 trillion, and as the world's largest semiconductor foundry with a 71% share of the global chip market, investors could see a 58% return if it secures membership in the $3 trillion club.
- Strong Financial Performance: In Q4, TSMC reported revenue of $33.7 billion, a 26% year-over-year increase, with earnings per share rising 35% to $3.14, while gross and operating margins improved to 59.9% and 50.8%, respectively, indicating enhanced profitability during expansion.
- Future Growth Expectations: Management forecasts first-quarter revenue of $35.2 billion, representing a 38% year-over-year growth, suggesting that the company will continue to thrive amid rising demand for high-end semiconductors.
- Optimistic Industry Outlook: Annual sales of high-end semiconductors are projected to approach $1 trillion by 2026, positioning TSMC to benefit from this trend, with analysts predicting revenues of $193.9 billion and $232.8 billion in 2027 and 2028, respectively.
See More
