Ditch AMD and 'just go with the pure play' Nvidia

Advanced Micro Devices (AMD) shares fall after the chipmaker reported third quarter results, with its fourth quarter outlook failing to impress investors. The AMD sell-off fueled a pullback in Nvidia stock as the weaker-than-anticipated guidance fuels some concerns about artificial intelligence (AI) chip demand. Harvest Portfolio Management CIO and Wall Street Beats partner Paul Meeks tells Morning Brief Hosts Seana Smith and Brad Smith to break down the results and what it means for the company and the AI space.

Meeks says, “I have a third of my portfolio in Nvidia. It's been a rock star. I don't think what AMD said yesterday is going to put Nvidia in peril, and with the big move that Nvidia has already seen [and] the fact that it's only down 1% today on AMD's sins, I actually think is a pretty good sign.”

He adds, “The problem [with AMD] is not an AI accelerator chip pure play. It's got a CPU business, too, and that business right now kind of sucks. And so the way I look at it, even though AMD will be a viable number two to Nvidia in the AI chip market, and even though the stock trades at a discount to Nvidia, I just go with the pure play. I just buy more Nvidia on this news and continue to avoid AMD, which has been a good trade for me.”

To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.

This post was written by Naomi Buchanan.

Video Transcript

Paul real quick.

I wanna get your thoughts on a MD.

We're seeing the stock sell off just a bit this morning.

Lots of questions or concern maybe about the guidance that was given.

We're also seeing though some weakness reflected in NVIDIA stock today as a result.

You're looking at NVIDIA also off just about 1%.

Should investors be viewing this as a buying opportunity for NVIDIA?

You know, I have uh a third of my portfolio in NVIDIA.

It's been a rock star.

Um I don't think what a MD said yesterday is going to put NVIDIA in peril and with the big move that NVIDIA has already seen, it's, it shares the fact that it's only down 1% today on a MD sins I actually think is a pretty good sign.

The way I look at it is, you know, a MD is a fine company, right?

They turned it around.

Doctor Lisa sue one of the best executives in Silicon Valley.

The problem is it is not an A I accelerator chip pure play.

It's got ac pu business too and that business right now kind of sucks.

And so the way I look at it, even though A MD will be a viable number two NVIDIA in the A I chip market.

And even though the stock trades at a discount to NVIDIA, I just go with the uh pure play.

I just buy more NVIDIA on this news and continue to avoid AM B which has been a good trade for me.

And so Paul with that in mind, it being the largest position in your portfolio.

I imagine you've been doing some dollar cost averaging over time into that position and growing it out.

Should investors who are trying to figure out if they should be buying NVIDIA ahead of earnings ahead of an election and even amidst any type of geopolitical, broader uncertainty, should they feel comfortable still adding into an uh NVIDIA position?

Yeah, it's a great question that you ask.

I haven't added to it for a while.

Of course, you know, my cost basis is several years ago.

Uh I think with all the stuff that's going on and the run that the stock has had if you own NVIDIA, I just hold it.

Uh Unfortunately, we're not gonna get a earnings report from them for, you know, too long, you know, about a month or so.

Um So let's just hold in like all these stocks, even NVIDIA, they always have a bad day.

Usually it's based on something that they can't control something mac low.

Uh you will get a chance to buy NVIDIA.

Uh lower, but for now just cool it and we'll see what happens on the quarter, but I don't expect uh the stock to act after reports like ad has acted today.

All right, Paul Meeks, who is the chief investment officer over at Harvest Portfolio Management and Wall Street beats partner.

Paul.

Always a pleasure to get some of your insights.

Thanks so much.

See you, Brent.