Markets· August 16, 2026 at 08:18 p.m.
Valuation Concerns Loom Over AMD as Nvidia Outshines
Key takeaways
- AMD's valuation is significantly higher than Nvidia's
- AMD's growth rates are slower than Nvidia's despite being more diversified
- Nvidia's data center growth rate could exceed AMD's in the recent quarter
Investors are urged to reconsider their positions in Advanced Micro Devices (AMD) due to its sky-high valuation, which could dampen the stock's future performance or even lead to a decline. The chipmaker's valuation stands at 124 times trailing earnings, significantly higher than Nvidia's 31.
In comparison, AMD is more expensive by every earnings metric and its growth rates are slower than Nvidia's, despite being a more diversified company.
AMD's data center division saw a revenue growth of 107% in Q2, while Nvidia reported a 92% growth in fiscal Q1. However, it is expected that Nvidia's data center growth rate could exceed AMD's in the recent quarter.
The Motley Fool Stock Advisor analyst team did not include AMD in their list of top 10 stocks for investors to buy now, raising questions about its future performance.
