Will AMD Be a Must-Own AI Stock in 2026?

Core Insights - AMD has significantly outperformed Nvidia in 2025, with AMD's stock rising nearly 80% compared to Nvidia's 35% increase [1][2] - The question remains whether AMD will maintain its status as a must-own stock in 2026 [2] Performance Comparison - AMD's stock had previously underperformed Nvidia, with AMD increasing about 230% and Nvidia around 1,160% since 2023 [1] - AMD's comeback in 2025 marks a notable shift in the competitive landscape of AI hardware [1] Competitive Positioning - Nvidia remains the preferred GPU vendor for AI hyperscalers, but AMD is closing the gap, particularly in software capabilities [4] - AMD's ROCm software has seen a tenfold increase in downloads year over year as of November 2025, indicating improved competitiveness [5] Market Opportunities - Nvidia's CEO noted that the company is "sold out" of cloud GPUs, prompting clients to seek alternative providers, with AMD being a top contender [6] - If AMD's hardware can deliver similar performance to Nvidia's at a lower price, it could attract more clients, enhancing AMD's market position [6] Growth Projections - AMD's management projects a 60% compounded annual growth rate (CAGR) for its data center division through 2030, despite a current growth rate of 22% [7][8] - Achieving this growth target could solidify AMD's status as a leading AI stock in the coming years [7]