AMD vs. Intel: Which Is the Better AI Chip Stock to Own for the Next 3 Years Following the Semiconductor Crash?

The stock market endured a significant decline on Thursday, November 5th, primarily driven by artificial intelligence (AI) semiconductor stocks. The downturn came in the wake of the U.S. midterm elections, which saw Democrats gain control of both houses of Congress and several governorships, including in Texas and Pennsylvania. In response to these election results, some newly elected officials advocated for a moratorium on the expansion of data centers, citing concerns.

However, a potential buying opportunity may arise as AI infrastructure stocks could experience further weakness, presenting an excellent chance for substantial gains for investors.

Big players such as Alphabet (GOOGL +0.78%) (GOOG +0.78%), Microsoft, and Amazon have already been proactively strategizing for a potentially more challenging political landscape. These companies are expanding their data centers overseas and considering alternative locations, including offshore and even in space. For instance, China recently constructed the world's first offshore wind-powered undersea data center, while SpaceX is actively pursuing plans to establish data centers in space.

AI companies are also adapting to the shifting political environment. Alphabet is collaborating with Bloom Energy on a self-sufficient AI data center powered by carbon capture, eliminating reliance on grid power in the Republican stronghold of Wyoming. Nvidia (NVDA +2.77%), on the other hand, is reportedly considering the acquisition and conversion of old telecom buildings into compact data centers, which would likely face fewer regulatory hurdles.

Given the political climate's impact on AI data centers, it's essential not to assume that the AI infrastructure build-out will suddenly slow down. With that in mind, let's examine two AI chip stocks that could potentially help investors make a fortune following this market pullback. Nvidia continues to lead the AI infrastructure sector, as its graphics processing units (GPUs) remain the primary chips powering AI workloads.

The company holds a dominant position in the training market, as most AI code was originally written on its CUDA software platform and optimized for its chips. Additionally, Nvidia has secured a significant portion of the high bandwidth memory (HBM) supply, ensuring its continued leadership.

Nvidia's platform has expanded over time, incorporating inference chips, central processing units (CPUs), networking, and a more extensive software layer. The company's Vera Rubin platform now generates around $40 billion per gigawatt, up from $18 billion for its Hopper platform. Nvidia's forward P/E ratio of 12 times fiscal 2028 estimates suggests significant growth potential. As the primary AI chip provider, Nvidia is well-positioned to capitalize on this expanding market.

Another AI chip stock worth considering is Broadcom (AVGO +0.74%). The company specializes in custom AI accelerators, developing IP and services that enable customers to turn designs into AI ASICs. Broadcom has already assisted Alphabet in developing its widely used tensor processing units (TPUs), which are now being offered to external customers.

Notable customers include Anthropic, Meta Platforms, OpenAI, and Oracle. This trend is expected to significantly boost Broadcom's AI chip revenue in the coming years, with the company aiming to double its revenue and reach $230 billion by fiscal 2028. Currently, Broadcom's stock is trading below 10 times fiscal 2028 estimates, presenting an opportunity for substantial gains if the company achieves this revenue target.