Freedom Holding’s senior analyst Egor Tolmachev says Advanced Micro Devices Inc (NASDAQ: AMD) could prove a better investment for long-term investors than rival Nvidia Corp (NASDAQ: NVDA).
In an exclusive interview with Invezz, Tolmachev dubbed the post-earnings decline in AMD shares “temporary”, related primarily to “profit-taking” after a more than 200% rally since early April.
Additionally, investor sentiment toward artificial intelligence (AI) has soured in recent weeks, which may also be putting pressure on the semiconductor giant this morning.
“We believe this correction provides a good opportunity to increase positions in AMD,” he added.
AMD stock has much more room to grow than Nvidia
According to the Freedom Holding analyst, AMD likely has significantly greater room for growth compared to NVDA, as the latter has already onboarded almost every major firm and government organization in the world as a customer.
In comparison, AMD’s artificial intelligence solutions-driven growth story “is only just beginning.”
Egor Tolmachev believes the Santa Clara-headquartered company could make “several very large AI announcements” at its Analyst Day on November 11th.
In fact, Amazon could team up with Advanced Micro Devices for the sake of diversifying its chips supply chain away from Nvidia and Marvell – an agreement he said could be disclosed at the AWS re: Invent event in December.
These developments – Tolmachev argued – could drive AMD stock price higher heading into 2026.
Accelerated growth could drive AMD shares higher in 2026
The aforementioned narrative could help AMD’s earnings to grow at a much faster clip than Nvidia moving forward, Tolmachev told Invezz in an interview today.
Over the next two years, he sees the Nasdaq-listed giant growing its adjusted EPS by 2.5x – versus 1.8x only for Nvidia. Advanced Micro Devices itself expects its gross margin (adjusted) to print at an impressive 54.5% in Q4.
In its recently concluded quarter, AMD grew its net income by a whopping 61% on a year-on-year basis to $1.24 billion, and that’s when it again didn’t sell any chips at all to Beijing in the three-month period.
AMD shares are worth owning here because the management’s better-than-expected guidance also doesn’t include revenue from shipments for the company’s advanced MI308 accelerators to China.
How long will AMD take to hit $600 per share
Egor Tolmachev sees AMD stock as a better pick than Nvidia for long-term investors, also because of the company’s recent agreement with OpenAI.
The said transaction granted OpenAI warrants to buy up to 160 million AMD shares (roughly 10% of the company’s equity) for $0.01.
These warrants are structured to vest in stages depending on achievement of KPIs related to the deployment of AI infrastructure based on AMD Instinct MI450, as well as AMD share price targets.
The final tranche is tied to AMD’s share price reaching $600.
This structure suggests price of $600 per share over the next 4-5 years is considered realistic – the Freedom Holding analyst concluded.
This would mean a more than 140% increase in AMD stock price by the end of this decade.
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