NVTS vs. AMD: Which Semiconductor Stock is a Better Buy Right Now?

Core Insights - Navitas Semiconductor (NVTS) and Advanced Micro Devices (AMD) are key players in the semiconductor industry, particularly in the context of AI-driven computing [1][2] - Both companies are investing heavily in next-generation semiconductor chips for AI applications, but their investment outlooks differ [2] Navitas Semiconductor Overview - Navitas Semiconductor is focusing on high-power markets and has been included in NVIDIA's 800-volt AI factory ecosystem, which is a significant development [3] - The company offers both Gallium nitride (GaN) and Silicon carbide (SiC) solutions across the full power path, with new mid-voltage GaN devices and high-voltage SiC modules being sampled [4] - There is increasing customer interest in Navitas's products as AI data centers adopt new power architectures, which is expected to drive growth [5] - Gradual growth is anticipated in 2026, with a larger opportunity in 2027 as new AI power designs gain traction [6] - Navitas Semiconductor's stock has surged 133.1% year-to-date, reflecting strong market performance [13] Advanced Micro Devices Overview - AMD reported record Data Center revenues of $4.3 billion in Q3 2025, a 22% year-over-year increase, driven by strong sales of EPYC server processors and Instinct MI350 GPUs [7] - The company has signed a multi-year agreement with OpenAI for MI450 GPUs, potentially generating over $100 billion in revenue [9] - Despite strong growth in the data center segment, AMD faces challenges such as an 8% decline in the embedded segment and rising operating expenses [10] - AMD's stock has gained 79% year-to-date, but it is trading at a forward sales multiple of 7.94X, lower than Navitas Semiconductor's 44.59X [13][16] Earnings Estimates and Valuation - For 2025, NVTS is expected to report a loss of 21 cents per share, while AMD's earnings estimate is $3.96 per share [11] - Analysts are becoming more bullish on NVTS, as indicated by the earnings estimate revision trend [12] - Navitas Semiconductor's higher valuation is justified by its inclusion in NVIDIA's ecosystem and improving financial performance [16] Conclusion - Navitas Semiconductor is positioned favorably for growth in AI chip markets, with a focus on GaN and SiC technologies [18] - AMD is experiencing growth in data center CPUs and AI GPUs but faces near-term challenges that may hinder overall performance [19] - Navitas Semiconductor holds a Zacks Rank 2 (Buy), while AMD has a Zacks Rank 3 (Hold), indicating a more favorable investment case for NVTS [20]