NVDA Creates Enormous Wealth for Its Shareholders Compared to AMD
Regardless, the stock price of a woman-led company still lags behind a man-led company in the same industry.
Break the Box continues its ground-breaking examination of the stock performance of men CEO-led companies vs woman CEO-led companies in the same industry. We are seeing quite a few data points that show the superior value creating acumen of men CEO’s in business.
Take a look at this chart of NVDA vs AMD, both semiconductor chip companies, with their stock price benchmarked since Lisa Su took over as CEO of AMD in October of 2014. Jensen Huang of NVDA has been CEO since he founded that company in 1993.
The chart provided compares the stock price performance of NVIDIA (NVDA) and Advanced Micro Devices (AMD) since Lisa Su became AMD CEO in 2014. NVIDIA has significantly outperformed AMD during this period, with NVIDIA showing +29,014.36% growth compared to AMD's +2,803.61% growth.
This match up is quite compelling for a number of reasons. Both Su and Huang are AMD veterans. Huang worked at AMD earlier in his career. Second, both Su and Huang are related. Huang’s mother is the youngest sister of Su’s maternal grandfather.
NVDA, led by Jensen Huang (since its founding in 1993), has experienced extraordinary growth, driven by its dominance in graphics processing units (GPUs), artificial intelligence (AI), and data center technologies.
Its strategic focus on AI and machine learning applications, along with its strong ecosystem of software tools like CUDA, has made it a leader in these rapidly expanding markets.
AMD, led by Lisa Su since 2014, has also seen remarkable growth, particularly due to its competitive Ryzen CPUs and EPYC server processors, which have successfully challenged Intel's dominance.
However, its growth has been more modest compared to NVIDIA, reflecting its lesser focus on AI and data center markets, which have been key drivers of NVIDIA's exponential growth.
NVDA has outperformed AMD significantly, largely due to its early and aggressive positioning in AI, GPUs for data centers, and machine learning, which have seen tremendous growth in recent years.
AMD, while successful in gaining CPU market share, has not achieved the same scale of growth in emerging markets like AI and high-performance computing (HPC).
The gap becomes even more glaring when one takes a look at how the market assigns value to the business, over and above its net worth.
NVDA has a market value added of USD3.2 trillion, vs AMD’s market value added of only USD139.0 billion.
A deeper analysis reveals that the performance gap is more reflective of differing strategic focuses and market conditions:
NVIDIA’s early dominance in GPUs for AI and data centers has positioned it to benefit disproportionately from the explosion in AI applications. AMD has focused more on CPUs and competing with Intel, a segment that, while lucrative, has not experienced the same explosive growth as AI-related technologies. But remember, a man made the decision to focus on AI, data centers, and GPU’s.
Jensen Huang’s focus on AI and software ecosystems has enabled NVIDIA to capture a significant share of emerging markets. Lisa Su has transformed AMD into a formidable competitor in CPUs and GPUs, but AMD's strategic focus on consumer and enterprise CPUs has limited its exposure to the fastest-growing segments of the semiconductor market. A man made the deliberate decision to focus NVDA on high growth markets where it could focus on leveraging its strengths.
The AI boom has been a game-changer for NVIDIA, giving it a first-mover advantage in this space. AMD's growth, while impressive, has been constrained by its reliance on market segments with slower growth compared to AI. It is still a matter of public record that a man focused NVDA on those high growth opportunities, vs AMD, led by a woman, focusing on lower growth opportunities.
The performance gap reflects strategic choices, market dynamics, and leadership capability. NVIDIA’s dominance in AI-related GPUs was a market-driven opportunity that AMD did not focus on to the same extent. A male CEO allocated capital for NVDA to take advantage of market dynamics.
Lisa Su has been widely credited with turning AMD around, making it a serious competitor to Intel and NVIDIA. AMD’s stock performance under her leadership has been exceptional, even if it lags behind NVIDIA’s. Regardless, the stock price of a woman led company still lags behind a man led company in the same industry.