NVDA vs. AMD: Which AI Hardware Stock Has Better Investment Potential?

NVIDIA Corporation NVDA and Advanced Micro Devices, Inc. AMD sit at the center of the artificial intelligence (AI) hardware revolution. Both are crucial players in the semiconductor space, competing directly in high-performance computing, graphics processing units (GPUs) and AI accelerators.While both companies are deeply committed to powering the next wave of AI computing, investors must be wondering which stock looks like the stronger bet right now. Let’s break down their fundamentals, growth drivers and valuations to find out.NVDA: The Undisputed AI GPU LeaderNVIDIA remains the backbone of the AI boom, with its GPUs powering everything from cloud data centers to self-driving vehicles. The company continues to dominate the AI infrastructure market, driven by explosive demand from cloud providers and enterprises. In the second quarter of fiscal 2026, NVIDIA’s data center revenues surged 56% year over year to $41.1 billion, underlining the strength of its core business.The company’s new GPU architectures, Hopper 200 and Blackwell, are rapidly gaining adoption as customers race to expand AI capabilities. The upcoming Blackwell Ultra and Vera Rubin platforms could further cement NVIDIA’s leadership as the AI hardware race intensifies.NVIDIA also secured U.S. government approval in August 2025 to sell its H20 chips in China under a revenue-sharing deal, where it pays 15% of Chinese H20 sales to the U.S. government. This move helps NVIDIA regain ground in China, a market that once contributed more than 20% of its revenues but has recently declined due to export restrictions. Regaining this access could stabilize a key revenue stream.Further, NVIDIA’s expanded partnership with OpenAI, which involves the construction of massive AI data centers powered by NVIDIA systems, is expected to boost long-term demand for its GPUs. Together, these developments reinforce NVIDIA’s position as the dominant supplier of AI chips worldwide.NVIDIA Corporation Price, Consensus and EPS Surprise NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation QuoteAMD: A Capable ChallengerAdvanced Micro Devices has transformed from an underdog to a strong competitor in the AI chip ecosystem. Its growing presence spans GPUs, CPUs, networking and AI accelerators, with major advances in both hardware and software.Advanced Micro Devices’ latest Instinct MI350X and MI355X GPUs, based on the CDNA-4 architecture, promise exceptional performance and energy efficiency. AMD’s open-source ROCm 7.0 AI software platform also supports popular models like LLaMA and DeepSeek, enhancing its competitiveness.Strategic acquisitions, including Nod.ai, Mipsology, Silo AI, Lamini, and Brium, have helped Advanced Micro Devices deepen its AI capabilities. The company expects its upcoming Helios GPUs and newer ROCm versions to drive further growth in 2026, supported by expanding demand from cloud hyperscalers and sovereign AI projects.Advanced Micro Devices’ data center segment, which includes AI products, has been a key growth engine. In the second quarter of 2025, the segment’s revenues grew 14.3% year over year to $3.24 billion, representing 42.2% of total sales.Its recent deals with OpenAI and Oracle are set to further boost demand for its products used for data centers. Under these agreements, Advanced Micro Devices will deploy 6 gigawatts of Instinct GPUs for OpenAI and 50,000 MI450 GPUs for Oracle’s AI supercluster. These partnerships demonstrate AMD’s growing relevance in large-scale AI infrastructure.Advanced Micro Devices, Inc. Price, Consensus and EPS Surprise Advanced Micro Devices, Inc. price-consensus-eps-surprise-chart | Advanced Micro Devices, Inc. QuoteNVDA vs. AMD: Which Has the Stronger Growth Outlook?Both companies will benefit from the surging demand for AI chips, but NVIDIA’s growth profile appears stronger in the near term. The Zacks Consensus Estimate for NVDA’s current fiscal-year 2026 revenues and earnings per share (EPS) indicates a year-over-year surge of 56.9% and 48.8%, respectively.By contrast, Advanced Micro Devices’ 2025 estimates point to more modest 27.6% revenue growth and an 18.7% EPS increase.While AMD’s trajectory is promising, NVIDIA continues to capture a larger share of the AI hardware spend, particularly from hyperscalers and enterprise clients, which are investing heavily in generative AI infrastructure.NVDA vs. AMD: Stock Performance and ValuationYear to date, Advanced Micro Devices’ stock has outperformed NVIDIA, rising 80.5% compared with NVIDIA’s 34.7% gain. This rally reflects optimism following AMD’s new AI chip launches and high-profile deals.NVDA vs. AMD: YTD Price Return PerformanceImage Source: Zacks Investment ResearchHowever, the sharp price surge has made Advanced Micro Devices' shares relatively expensive. AMD now trades at a forward 12-month price-to-earnings multiple of 39.49, well above NVIDIA’s 31.69. Given NVIDIA’s faster growth, the valuation gap suggests AMD has less room for upside.NVDA vs. AMD: Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchConclusion: NVIDIA Is the Better Investment Right NowWhile Advanced Micro Devices’ rapid progress and expanding partnerships make it a formidable contender, NVIDIA remains the clear leader in AI hardware. A superior product lineup, an unmatched software ecosystem, a stronger growth profile and a relatively cheaper valuation make NVIDIA a better investment choice in the AI chip race today.NVIDIA carries a Zacks Rank #2 (Buy), making it a clear winner over Advanced Micro Devices, which has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks