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Both Advanced Micro Devices (NASDAQ:AMD) and Ambarella (NASDAQ:AMBA) have seen their stock prices skyrocket by about 70% over the past three months. That's great news for the companies' current shareholders, of course, but when it comes to picking the long-term winner between the two, which is your best bet now?

To answer that, let's take a quick look at what each of them has going for it:

Advanced Micro Devices' advantages 

AMD is a major player in the graphics processing unit (GPU) market, where it completes with the other GPU powerhouse, NVIDIA (NASDAQ:NVDA). While NVIDIA makes the majority of sales in the discrete GPU market, AMD has managed to increase its percentage to about 34%. 

Some of AMD's share price gains came after the recent release of its new Radeon RX 480, RX 470, and RX 460 graphics cards. While NVIDIA has had its share of major product releases this year as well, investors were likely impressed that the company's graphics cards are much cheaper than NVIDIA's.

There are also two new growth areas that AMD is poised to benefit from: PCs and virtual reality (VR). Lots of companies are betting on VR, but AMD's GPUs, like its new RX 480, are capable of handling the data-processing demands of higher-end VR headsets. 

Combined, the markets for virtual reality and augmented reality are expected to hit $70 billion by 2020, and AMD should be able to grow its GPU sales right along with that trend. VR hardware sales (which include graphics cards) are expected to grow by 183% between now and 2020, according to IDC.

Additionally, AMD says it will unveil its new Zen PC processor in the first quarter of 2017. The long-awaited processor should help it expand further into the higher-end PC market (an area it currently lags far behind in). 

If all that weren't enough, AMD's processors for gaming consoles are poised for more growth. Sony is releasing an updated version of its PlayStation 4 soon, called the Neo, and Microsoft is readying a new version of the Xbox One. Both are expected to ship with AMD's technology inside them. Gaming consoles could play an integral role in VR adoption, which leaves even more opportunity for AMD.

Ambarella's opportunities 

Ambarella is best known for its SoC (system on a chip) hardware that powers GoPro's (NASDAQ:GPRO) action cameras. That's been both a blessing and a curse for the company, as its fate is largely tied to how well or poorly GoPro's devices are selling.

Ambarella's recent share price gains have been due in large part to the company's strong fiscal Q1 2017 beat, and to investors' anticipation that there are even brighter days ahead.

That optimism has been fueled by the company notching more design wins across all of its major business segments in the past quarter, according to management's comments on the Q1 earnings call. But it remains to be seen whether Ambarella can live up to investors' positive feelings by delivering solid earnings. Second-quarter revenue estimates are for a range of between $60 million and $66 million, which would represent a 21% to 28% year-over-year decline.

Ambarella also makes image-processing semiconductors for drones, security cameras, and automotive cameras, and is expanding into processors for virtual reality headsets. All of these are very promising markets, but the company's bills are still largely paid from sales of chips to GoPro. 

That could be a temporarily good thing for the company this holiday season, when GoPro's Karma drone and its new HERO5 camera are expected to debut. It's believed that Ambarella's hardware won a spot in the HERO5, and might also be found in the Karma drone as well. 

Who wins?

Longtime Ambarella investors may already be used to the company's chaotic stock price pops and dips, and I wouldn't be surprised if we see more of them as we edge closer to the holiday season. The current stock price run-up makes the shares tempting, but remember that if the HERO5 and Karma wind up with poor sales (or if Ambarella didn't win a spot for its hardware in the drone), we're likely to see another huge sell-off. Because the company's fate is still so closely tied to GoPro's, I don't think Ambarella is a great long-term bet. 

As for AMD, some of the company's stock price gains are based on speculation about the future prospects of PC processor sales and VR adoption. That's not all bad, because these are two legitimate areas for investors to get excited about. But the company is also grounded in solid GPU sales and is continually gaining more market share in that space. 

AMD's fate isn't as closely tied to another single company as Ambarella's is, and for that reason -- along with its strong GPU position -- it's the better play for long-term investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.