In 2023, artificial intelligence (AI) quickly rocketed to the forefront of investors' minds and pocketbooks. And shares in the industry leader, Nvidia (NASDAQ: NVDA), ballooned 237% over the last 12 months as its revenue and profits soared. This stemmed from rising demand for the company's graphics processing units (GPUs) for running and training the most advanced AI applications.

Advanced Micro Devices (NASDAQ: AMD) stock rose 137% in the same period. But unlike Nvidia, AMD's rally was more based on future expectations (third-quarter revenue grew just 4% compared to Nvidia's 206%). So, in 2024, AMD will have to prove itself deserving of all the hype. 

Since it acquired ATI Technologies in 2006, AMD has been a direct competitor to Nvidia in the market for GPUs. These computer chips work by running multiple tasks simultaneously (parallel processing) -- a technique that turned out to have huge potential for training the vast amounts of data required for generative artificial intelligence applications.

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Source Fool.com