AMD’s leapfrog moment has arrived. Here’s why it may be a unique opportunity to buy the stock.

Over the past few years, investors have been unable to buy semiconductor stocks pretty fast. One of the main reasons for this is that sophisticated chips called graphics processing units (GPUs) are one of the main power sources for artificial intelligence (AI) applications such as machine learning and even autonomous driving.

As the AI ​​narrative continues to drive markets higher, chip stocks are likely to remain in high demand. As things stand, Nvidia is widely considered the market leader among AI-powered chip companies. However, Nvidia just announced to investors that the new Blackwell Series GPUs to be Delayed due to a design flaw.

While I’m not a proponent of Schadenfreude, I view this setback at Nvidia as a unique moment in the life of the company’s biggest competitor, Advanced Micro Devices (NASDAQ: AMD)Let’s look at the big picture and assess how AMD could take advantage of Nvidia’s setback.

The story of two chip manufacturers

The charts below illustrate a number of important financial metrics for Nvidia and AMD.

On one side of the equation, Nvidia’s sales and profits are steadily increasing, leading to an increasingly steep slope among the colored lines shown below. But on the other side, Nvidia’s main rival is exhibiting notable inconsistencies in how it operates.

The dynamics illustrated above clearly indicate that chip buyers not only prefer Nvidia, but are also willing to pay a premium price for it. While Nvidia has remained the go-to semiconductor company since the AI ​​revolution began, AMD has an incredible opportunity to leapfrog Nvidia right now.

Why This Could Be AMD’s Make-or-Break Moment

Wall Street analysts estimate that Nvidia holds nearly 80% of the AI ​​chip market. While AMD has done what it can to match Nvidia’s blistering pace of innovation, I think the company has largely tried to distract investors from Nvidia’s overwhelming lead with a series of questionable acquisitions.

In my opinion, time is running out for AMD and the company cannot afford to rely on acquisitions to grow its products and ensure organic growth. The only bright spot for AMD right now is that the company’s MI300X GPU accelerator is the fastest product to reach $1 billion in sales in the company’s history.

It’s clear that demand for AMD’s GPUs is strong, but it’s not on the same scale as Nvidia’s. Now that Blackwell shipments are delayed until next year, AMD has an opportunity to seize the moment.

The story continues

It is important to stay grounded

While Blackwell’s delays aren’t necessarily good news, investors need to be realistic. I suspect some companies will opt for alternatives to Blackwell in the meantime, but I don’t think Nvidia will have a hard time selling these chips once it finally fixes its design flaw.

So while AMD probably isn’t going to suddenly capture overwhelming, direct market share…