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NVDA vs. AMAT: Which Semiconductor Stock Is the Better Buy Now?
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Key Takeaways
NVDA posted 62% sales growth in fiscal Q3 2026, driven by explosive AI data center demand and GPU adoption.
AMAT gains from foundry, DRAM and HBM demand but faces China restrictions and slower ICAPS growth.
NVDA offers stronger growth visibility than AMAT, despite both trading at almost similar P/E levels.
NVIDIA Corporation (NVDA - Free Report) and Applied Materials, Inc. (AMAT - Free Report) are two of the most important players riding on the global semiconductor and artificial intelligence (AI) boom. NVIDIA dominates the AI chip design market, powering data centers, cloud platforms and next-generation AI applications. Meanwhile, Applied Materials sits at the heart of chip manufacturing, supplying critical equipment used by foundries to produce advanced semiconductors.
Both companies are benefiting from the rise of AI, but their business models, risk profiles and long-term outlooks differ. Let’s break down how each company is performing and which one looks like the better investment right now.
The Case for NVDA Stock
NVIDIA remains the backbone of the AI boom, with its graphics processing units (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 third quarter of fiscal 2026, NVIDIA’s revenues surged 62% year over year to $57 billion, while earnings per share (EPS) jumped 60% to $1.30.
NVIDIA Corporation Price, Consensus and EPS Surprise
The company’s new GPU architectures, Hopper 300 and Blackwell, are rapidly gaining adoption as customers race to expand AI capabilities. The Blackwell Ultra and upcoming Vera Rubin platforms could further cement NVIDIA’s leadership as the AI hardware race intensifies.
NVIDIA’s most powerful growth engine continues to be its Data Center business. In the third quarter of fiscal 2026, the segment generated $51.22 billion in revenues, representing 89.8% of total sales. This marked a staggering 66% year-over-year increase and 25% sequential growth.
The robust performance was mainly driven by higher shipments of the Blackwell GPU computing platforms that are used for the training and inference of large language models, recommendation engines and generative AI applications.
NVIDIA’s 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. The deal reinforces NVIDIA’s position as the dominant supplier of AI chips worldwide.
The Case for AMAT Stock
Applied Materials is a major manufacturer of semiconductor fabrication equipment, covering deposition, etching and inspection, serving the most crucial stages of chip manufacturing. AMAT is shining on the strong demand for its foundry-logic, DRAM and NAND products.
Applied Materials expects its leading-edge foundry, logic, DRAM and high-bandwidth memory (HBM) to be the fastest-growing wafer fabrication equipment businesses in 2026. AMAT’s advanced packaging business, which is currently valued at $1.5 billion, is still on track to double to $3 billion over the next few years, driven by HBM demand and next-generation packaging architectures.
Applied Materials has restructured its pricing program, which is expected to contribute most of the 120-basis point gross margin expansion expected for fiscal 2026. This cost restructuring will further provide AMAT with enough headroom to ramp up its research & development investments. AMAT is setting up the Equipment and Process Innovation and Commercialization center for research, which is expected to be operational by 2026.
Nonetheless, Applied Materials is grappling with some near-term challenges. A major headwind for AMAT is increasing U.S.-China tensions and export restrictions on semiconductor manufacturing equipment. China remains a crucial market for Applied Materials, accounting for a significant portion of total revenues. However, U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers are hurting Applied Materials’ sales and growth outlook.
Additionally, moderating growth at its IoT, Communications, Automotive, Power and Sensors segment after a strong 2023-2024 cycle is weighing on Applied Materials’ overall financial performance. In the last reported financial results for the fourth quarter of fiscal 2025, the company’s revenues and non-GAAP EPS declined 3% and 6%, respectively, year over year.
Applied Materials, Inc. Price, Consensus and EPS Surprise
NVDA vs. AMAT: 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 62% and 55.2%, respectively. For fiscal 2027, the top and bottom lines are projected to grow 42.2% and 52.9%, respectively.
By contrast, Applied Materials’ fiscal 2026 estimates point to mere 2% revenue growth and a 1.4% EPS increase. For fiscal 2027, the top and bottom lines are projected to rise 10.3% and 17.9%, respectively.
NVDA vs. AMAT: Price Performance & Valuation Check
NVIDIA shares have risen 34.7% year to date, while Applied Materials has soared 57.6%.
Image Source: Zacks Investment Research
On the valuation front, Applied Materials trades at a forward 12-month price-to-earnings (P/E) multiple of 26.18, slightly below NVIDIA’s 26.54.
Image Source: Zacks Investment Research
NVDA: A Better Investment Bet Than AMAT
Both NVIDIA and Applied Materials are high-quality semiconductor stocks benefiting from the AI boom. However, NVIDIA offers stronger growth momentum, clearer demand visibility and a deeper competitive moat in AI computing. Despite valuation risks, its leadership position makes NVDA the better investment option than AMAT right now for investors seeking higher growth potential.
Image: Bigstock
NVDA vs. AMAT: Which Semiconductor Stock Is the Better Buy Now?
Key Takeaways
NVIDIA Corporation (NVDA - Free Report) and Applied Materials, Inc. (AMAT - Free Report) are two of the most important players riding on the global semiconductor and artificial intelligence (AI) boom. NVIDIA dominates the AI chip design market, powering data centers, cloud platforms and next-generation AI applications. Meanwhile, Applied Materials sits at the heart of chip manufacturing, supplying critical equipment used by foundries to produce advanced semiconductors.
Both companies are benefiting from the rise of AI, but their business models, risk profiles and long-term outlooks differ. Let’s break down how each company is performing and which one looks like the better investment right now.
The Case for NVDA Stock
NVIDIA remains the backbone of the AI boom, with its graphics processing units (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 third quarter of fiscal 2026, NVIDIA’s revenues surged 62% year over year to $57 billion, while earnings per share (EPS) jumped 60% to $1.30.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
The company’s new GPU architectures, Hopper 300 and Blackwell, are rapidly gaining adoption as customers race to expand AI capabilities. The Blackwell Ultra and upcoming Vera Rubin platforms could further cement NVIDIA’s leadership as the AI hardware race intensifies.
NVIDIA’s most powerful growth engine continues to be its Data Center business. In the third quarter of fiscal 2026, the segment generated $51.22 billion in revenues, representing 89.8% of total sales. This marked a staggering 66% year-over-year increase and 25% sequential growth.
The robust performance was mainly driven by higher shipments of the Blackwell GPU computing platforms that are used for the training and inference of large language models, recommendation engines and generative AI applications.
NVIDIA’s 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. The deal reinforces NVIDIA’s position as the dominant supplier of AI chips worldwide.
The Case for AMAT Stock
Applied Materials is a major manufacturer of semiconductor fabrication equipment, covering deposition, etching and inspection, serving the most crucial stages of chip manufacturing. AMAT is shining on the strong demand for its foundry-logic, DRAM and NAND products.
Applied Materials expects its leading-edge foundry, logic, DRAM and high-bandwidth memory (HBM) to be the fastest-growing wafer fabrication equipment businesses in 2026. AMAT’s advanced packaging business, which is currently valued at $1.5 billion, is still on track to double to $3 billion over the next few years, driven by HBM demand and next-generation packaging architectures.
Applied Materials has restructured its pricing program, which is expected to contribute most of the 120-basis point gross margin expansion expected for fiscal 2026. This cost restructuring will further provide AMAT with enough headroom to ramp up its research & development investments. AMAT is setting up the Equipment and Process Innovation and Commercialization center for research, which is expected to be operational by 2026.
Nonetheless, Applied Materials is grappling with some near-term challenges. A major headwind for AMAT is increasing U.S.-China tensions and export restrictions on semiconductor manufacturing equipment. China remains a crucial market for Applied Materials, accounting for a significant portion of total revenues. However, U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers are hurting Applied Materials’ sales and growth outlook.
Additionally, moderating growth at its IoT, Communications, Automotive, Power and Sensors segment after a strong 2023-2024 cycle is weighing on Applied Materials’ overall financial performance. In the last reported financial results for the fourth quarter of fiscal 2025, the company’s revenues and non-GAAP EPS declined 3% and 6%, respectively, year over year.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. Quote
NVDA vs. AMAT: 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 62% and 55.2%, respectively. For fiscal 2027, the top and bottom lines are projected to grow 42.2% and 52.9%, respectively.
By contrast, Applied Materials’ fiscal 2026 estimates point to mere 2% revenue growth and a 1.4% EPS increase. For fiscal 2027, the top and bottom lines are projected to rise 10.3% and 17.9%, respectively.
NVDA vs. AMAT: Price Performance & Valuation Check
NVIDIA shares have risen 34.7% year to date, while Applied Materials has soared 57.6%.
Image Source: Zacks Investment Research
On the valuation front, Applied Materials trades at a forward 12-month price-to-earnings (P/E) multiple of 26.18, slightly below NVIDIA’s 26.54.
Image Source: Zacks Investment Research
NVDA: A Better Investment Bet Than AMAT
Both NVIDIA and Applied Materials are high-quality semiconductor stocks benefiting from the AI boom. However, NVIDIA offers stronger growth momentum, clearer demand visibility and a deeper competitive moat in AI computing. Despite valuation risks, its leadership position makes NVDA the better investment option than AMAT right now for investors seeking higher growth potential.
NVDA sports a Zacks Rank #1 (Strong Buy), making it a clear winner over AMAT, which has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.