Nvidia (NVDA) and Advanced Micro Devices (AMD) are at the center of the AI boom, but their recent developments highlight different ways the chipmakers are expanding their AI capabilities. Rosenblatt Securities analyst Kevin Cassidy shared positive views on both companies following the announcements.

Cassidy reiterated his Buy rating on NVDA with a $390 price target, implying 69.6% upside potential. He also maintained his Buy rating on AMD with a $700 price target, suggesting 15.4% upside.

Cassidy is a five-star analyst on TipRanks, ranking #37 out of 12,505 analysts tracked. He has a 62% success rate and an average return per rating of 41.40%.

Nvidia Expands Its AI Software Ecosystem

Nvidia recently launched its Open Agent Safety Platform, an open-source initiative designed to provide greater security and control as AI agents become more autonomous. The platform uses OpenShell software and Nvidia Sentry to monitor AI agents and stop them from taking actions outside predefined limits. More than 100 companies and organizations across the AI industry are supporting the initiative.

Cassidy sees this launch as another sign of Nvidia's strong position in the sector. He believes the platform could help reduce concerns about AI agents taking unwanted actions and make AI agents safer as their use grows.

The announcement also came alongside a major capital-return initiative. Nvidia authorized an additional $150 billion for share repurchases, bringing its remaining authorization to $235 billion through fiscal 2028.

Cassidy sees the buyback as consistent with management's commitment to returning 50% of free cash flow to investors.

AMD Broadens Its AI Expertise

AMD, meanwhile, announced an $8.2 billion all-stock agreement to acquire World Labs, an AI model and research company led by AI pioneer Fei-Fei Li. The deal is expected to strengthen AMD's AI software and modeling capabilities, particularly in areas such as autonomous systems, simulation, gaming, and design.

Cassidy was impressed by management's efforts to strengthen AMD's AI capabilities. He said World Labs' engineers could help AMD develop AI systems faster and enter new areas such as robotics. He views the deal as a way for AMD to bring future AI research and development in-house.

Importantly, Cassidy's comments show how Nvidia and AMD are taking different approaches to the AI market. Nvidia is focusing on AI safety, while AMD is expanding its AI software and modeling capabilities.

NVDA or AMD: Which AI Stock Has Higher Upside?

According to TipRanks' Stock Comparison Tool, both Nvidia and AMD currently have a Strong Buy consensus rating from Wall Street analysts. Among the two stocks, NVDA has the highest average analyst price-target upside at 41.7%, followed by AMD at 6.6%.