Semiconductor Stock Picks: NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD)

June 13, 2016

Ian Ing, Analyst at MKM Partners, says top stock picks NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD) are both exposed to growth areas such as gaming and autonomous driving and drones.

There’s a type of processor that’s very good at doing these functions that’s called a GPU or graphics processing unit, and the companies that are most exposed to these growth areas are I would say NVIDIA. There’s another company called AMD, Advanced Micro Devices, that are also exposed there, but I would say these two are probably exposed the most. NVIDIA probably has enough scale and resources to really pursue the full opportunity that’s available.

I think there’s still a lot of controversy around the gaming companies […] There’s a lot of concerns that the gaming market cannot grow as much going forward. I think they are still misunderstood. Smartphones and PCs are not growing anymore. The new emerging applications need the type of chips supplied by NVIDIA and AMD. I think those are the two underappreciated ones.

AMD logo
Advanced Micro Devices, Inc.

Ing says NVIDIA and AMD have the right processing solutions that are being used in many applications.

Core gaming is a really important business and growth driver for these two companies. Longer term, GPUs are useful in autonomous driving, self-driving cars and self-driving drones, etc. There’s just a lot of opportunity in front of primarily NVIDIA, given their resources to pursue much of the emerging opportunities in GPUs, but also AMD.

I think a lot of the new emerging applications are again where AMD and NVIDIA are exposed to because of the type of processing they do […] I mean a lot of the new applications require very repetitive, very homogeneous processing, and these two companies just have the right solutions for those kinds of applications.

Ian Ing
Ian Ing