Chip stocks, particularly graphics processing units (GPUs), have gained significant attention in the booming artificial intelligence (AI) market. Nvidia, a leader in GPUs, has enjoyed substantial success with soaring earnings and a stock price increase of over 280% in the last year due to increased chip sales. However, two other chipmakers, Advanced Micro Devices (AMD) and Intel, are emerging as potential challengers to Nvidia's dominance in the AI sector. Both companies are investing heavily in AI and have the potential for significant gains in the future, as they are still in the early stages of their AI ventures. AMD, with the second-largest market share in GPUs, poses a strong threat to Nvidia in the AI space. The company has restructured its business to prioritize AI and has introduced its MI300X AI GPU, directly competing with Nvidia.

Additionally, AMD aims to lead in AI-powered PCs, as AI integration is expected to boost PC shipments significantly. Intel, on the other hand, unveiled AI chips to rival Nvidia and AMD and showcased Core Ultra processors and Xeon server chips with neural processing units for running AI programs more efficiently. However, Intel faced challenges with weak guidance, causing a decline in its stock price. Both AMD and Intel have attractive growth potential and earnings per share (EPS) estimates support their future prospects. Based on these estimates and forward price-to-earnings ratios, AMD's stock price could potentially rise by 97% and Intel's by 120% by fiscal 2026. Considering the current positions of the companies, AMD seems to have a more reliable position in AI and a more financially stable business, making it the better AI stock to buy over Intel for the month of March 2024, despite Intel's brand power and infrastructure advantages. Investors may consider investing in Advanced Micro Devices and other stocks recommended by Motley Fool Stock Advisor, which has a strong track record of beating the market.