Based on knowledge from CNBC going again to 1980, the Nasdaq and different benchmark indexes have traditionally risen within the months following a presidential election. This pattern has continued in 2024, with the tech-heavy index up by round 10% since Donald Trump’s win on Nov. 5. A brand new administration can imply much less political uncertainty, making many market contributors extra snug holding property generally.
There isn’t a assure that the Nasdaq’s momentum will proceed in 2025. However as Wall Road continues to pour cash into AI tech, Superior Micro Gadgets (NASDAQ: AMD) and Amazon (NASDAQ: AMZN) are two shares might experience the wave into one other 12 months of stellar progress. Let’s dig deeper.
With shares down 13% this 12 months, AMD is a chipmaker that one way or the other missed out on a lot of the generative AI rally regardless of being an enormous participant within the {hardware} facet of the chance. The chipmaker’s diversified enterprise mannequin makes it an important different to Nvidia. And an affordable valuation is icing on the cake for traders.
AMD’s third-quarter income grew by a modest 17% 12 months over 12 months to $6.8 billion. Nonetheless, this consolidated quantity may conceal the spectacular efficiency of its knowledge heart section, which soared 122% to $3.5 billion, pushed by gross sales of superior graphics processing items (GPUs) for operating and coaching AI algorithms. Administration plans to drive continued knowledge heart progress by releasing new, extra superior chips, such because the Intuition MI325X collection, designed to compete with Nvidia’s Blackwell.
With 51% of income coming from knowledge heart gross sales, AMD is far more diversified than Nvidia, which earned round 88% of its third-quarter gross sales from the information heart section. Whereas AMD’s much less AI-driven enterprise mannequin has led to slower near-term progress, it can make the corporate far more proof against a possible slowdown within the business.
AMD’s ahead price-to-earnings (P/E) a number of of 25 can also be decrease than Nvidia’s, which is round 31 occasions ahead earnings.
Whereas AMD is diversified inside the know-how {hardware} business, Amazon takes diversification to a different stage with footprints in e-commerce, cloud computing, and AI infrastructure. Administration’s cost-cutting efforts have put the corporate in a wonderful place to execute its long-term technique and return worth to traders.
Below the management of CEO Andy Jassy, who took the helm in early 2021, Amazon has pivoted from a growth-at-all-costs technique to 1 that prioritizes sustainable profitability. A number of years of layoffs and fulfillment-network optimization have labored wonders on its operational outcomes.
