With yesterday’s news that SoftBank sold its entire $5.8 billion stake in Nvidia ($NVDA) and AMD ($AMD) announcing a multi-year AI chip deal with OpenAI, the next best trade over the next 1–2 years might be long AMD and short an equal amount of NVDA.
For the last few years, it’s been all Nvidia.
If you pull up AMD vs NVDA on Stock Analysis, you’ll see how wide the gap is: NVDA +1,127% vs AMD +247% over the past three years.
SoftBank’s sale isn’t necessarily bearish on Nvidia, but it shows how crowded the trade has become. Meanwhile, AMD just landed one of its biggest wins yet with a major chip-supply deal with OpenAI that could add tens of billions in future revenue and gives OpenAI the option to acquire up to 10% of AMD.
Maybe the next phase of the AI trade isn’t about betting on AI itself, but about who leads it.
Long AMD. Short NVDA. Equal size.
A simple relative-value idea if you think the underdog’s ready to close the gap.
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Cheers,
Kyle Vallans
Founder, SaveOnTrading
PS: Stock Analysis, the software used above is just $5.92 per month (71.10 per year) when you use discount code SAVEONTRADING at checkout here. They might just be raising their prices next year, so lock it in now;)
