<div id="readability-page-1">Over the past year, it's felt like nearly every other headline has focused on artificial intelligence (AI) in one form or another. Interest in the technology has skyrocketed, with countless companies reframing their businesses around AI. The emergence of OpenAI's ChatGPT skyrocketed demand for similar services across a range of industries, presenting dozens of exciting investment opportunities. In fact, the Nasdaq Composite has risen 29% in the last 12 months, with growth driven primarily thanks to excitement over AI. Yet this new market is still in its infancy, suggesting it's not too late to invest. And chip stocks appear to be some of the best options. These companies are developing the hardware that make AI possible, with chip demand unlikely to slow any time soon. Currently, two attractive AI chip stocks are Intel (INTC -2.40%) and Advanced Micro Devices (AMD -5.44%). Both chipmakers have expanding positions in this budding market and could deliver major gains over the long term. So, let's examine these two businesses and determine whether Intel or AMD is the better AI stock today. <h2>Intel</h2> If you're looking purely at Intel's recent performance, you might wonder why it should potentially be considered over AMD. Shares in Intel are down nearly 45% since 2021 after repeated hits to its business. The company was a king in the chip market for years, with a dominant market share in central processing units (CPUs) and a lucrative partnership with Apple. However, the boom in AI has seen the chip industry pivot to graphics processing units (GPUs), while CPU demand has slowed. Meanwhile, Intel no longer has the security of supplying its chips to Apple, with the iPhone company announcing a change to using in-house-designed chips over Intel's back in 2020. Alongside unforeseen macroeconomic headwinds that prompted poor demand in the PC market in 2022, Intel has been on the back foot. However, recent challenges are precisely why Intel could be a winning long-term option. The company is investing heavily in AI, launching its Gaudi 3 AI GPUs earlier this month, promising &#34;50% on average better inference and 40% on average better power efficiency&#34; than market leader Nvidia's GPUs. Moreover, the company is leveraging its dominant position in CPUs to expand in the market. Its Xeon 6 processors have increased AI capabilities and offer four times the performance of its second-generation Xeon processors. Intel has a long way to go before returning to its former glory, but a tumble could make its stock one of the best-valued ways to make a long-term investment in AI. <h2>Advanced Micro Devices</h2> Shares in AMD are up 68% in the last year, rallying investors with its potential in AI. The company has benefited from sympathy growth, as its rival Nvidia's business has blown up over the last year. Nvidia's AI GPUs have flown off the shelves since the start of 2023, significantly profiting from the headstart it got in the market over AMD and Intel. However, AMD is moving to match its new valuation and secure its position in the lucrative AI market. Like Intel, AMD has launched its own AI GPUs meant to go head-to-head with Nvidia's hardware. However, AMD wants more than just Nvidia's GPU market share. The company seeks to lead its own space within AI with its venture into AI-powered personal computers. On April 16, AMD launched its Ryzen Pro 8000 for desktops and laptops. According to PCWorld, the new generation of chips makes AMD the only CPU developer &#34;offering AI-powered NPUs in business desktop PCs.&#34; With demand for AI continuing to soar, the company could experience an impressive growth spurt over the next decade. <h2>Is Intel or AMD the better AI stock?</h2> Intel and AMD have exciting outlooks in AI and would likely prove assets to any portfolio over the long term. However, some key valuation metrics suggest Intel is trading at a far better bargain than AMD. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/2815651a8ad505c3f5002d1529285e59.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="541" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/2815651a8ad505c3f5002d1529285e59.png"/> Data by YCharts. This charts above shows that Intel has a significantly lower forward price-to-earnings ratio (P/E) and price-to-sales ratio (P/S) than AMD. These metrics are helpful in determining a stock's value as they consider the company's financials against its share price. Forward P/E is calculated by dividing a company's current share price by its estimated future earnings per share. Meanwhile, P/S divides its market cap by its trailing 12-month revenue. For both metrics, the lower the figure, the better the value. As a result, Intel's lower forward P/E and P/S indicate its stock is a bargain compared to AMD. And with its expanding position in AI, Intel is a no-brainer right now. However, it's not a bad idea to still keep AMD on your radar and strike when the time is right. </div>

INTC

Two chip stocks, Intel and AMD, are considered attractive options for investing in AI. Intel has faced challenges but is investing heavily in AI and has a lower valuation compared to AMD. AMD is also making moves in the AI market and has launched its own AI GPUs. While Intel is currently seen as a better bargain, AMD should still be kept on the radar.

Better AI Stock: Intel vs. AMD