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NVIDIA vs. AMD: Only One AI Stock Is a Solid Buy Now
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Key Takeaways
NVIDIA's Data Center revenues surged 117%, driving fiscal second-quarter revenues to $96.2 billion.
AMD's Data Center revenues more than doubled, while third-quarter sales are expected to rise 41%.
NVIDIA has higher ROE and a lower forward P/E than AMD, supporting its stronger investment case.
As artificial intelligence (AI) spending accelerates, both NVIDIA Corporation (NVDA - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) have benefited from strong demand across their Data Center business. However, the two companies differ in growth prospects, profitability, competitive advantages and valuation. So, which one looks like the compelling investment opportunity right now? Let’s take a closer look –
The Bullish Case for NVDA Stock
According to the company’s Aug. 26 press release, NVIDIA reported $96.2 billion in revenues for the fiscal second quarter of 2027, up 106% year over year and 18% quarter over quarter. The Data Center segment primarily drove NVIDIA’s revenues, underscoring the company’s dominant position in AI infrastructure. Data Center revenues were $89 billion, up 117% year over year and 18% sequentially (read more: NVIDIA Surpasses Q2 Earnings and Revenue Estimates).
NVIDIA continues to maintain high profitability along with strong revenue growth, highlighting significant pricing power and operating efficiency. Both GAAP and non-GAAP margins were 75% in the fiscal second quarter, up from around 72.5% a year ago. The company is also converting its rapid revenue growth into even stronger earnings growth, as operating income continues to grow.
Looking ahead, NVIDIA projects fiscal third-quarter 2027 revenues to reach $108 billion, with an estimated range of plus or minus 2%. At the midpoint, this would represent a 12% sequential increase, suggesting that the company’s strong growth momentum isn’t slowing down. What’s more, NVIDIA’s cutting-edge Vera Rubin platform is in full production, positioning the company to capitalize on the next wave of AI infrastructure spending.
The Bullish Case for AMD Stock
AMD’s Data Center revenue growth was impressive in the second quarter of 2026, more than doubling from the year-ago period. Overall, AMD reported revenues of $11.5 billion, up 50% year over year and a 13% rise from the prior quarter, according to the company’s Aug. 4 press release (read more: Advanced Micro Q2 Earnings: How Key Metrics Compare to Wall Street Estimates).
Revenue growth was driven in part by the company’s EPYC server processors. Meanwhile, AMD’s Helios platform has begun its initial ramp-up phase, while Instinct accelerators are scaling rapidly. As a result, AMD expects third-quarter revenues to reach $13 billion, plus or minus $300 million. From the midpoint, this would translate into 41% year-over-year growth and a 13% sequential rise.
AMD also expects stronger Data Center sales during the second half of 2026. Most importantly, AMD expects profitability to improve continuously alongside robust revenue growth. The company projects a solid non-GAAP gross margin of 56% in the third quarter, highlighting its ongoing margin expansion.
NVIDIA or AMD: Which AI Stock Is the Better Buy Now
NVIDIA’s latest blowout quarterly result has reinforced its position as a leading beneficiary of the AI infrastructure boom. Strong Data Center growth, expanding profitability, and the production ramp of Vera Rubin indicate a bullish near-term outlook for NVIDIA. Notably, NVIDIA’s guidance doesn’t include any China-related sales, meaning any possible sales from the region could further boost growth.
At the same time, AMD’s accelerating Data Center business, strong EPYC and Instinct demand, and improving margins provide the company with a solid foundation for continued growth ahead.
However, NVIDIA has repeatedly demonstrated its capability to turn massive AI demand into revenue and earnings growth, while AMD is still trying to expand its market share. NVIDIA’s competitive advantage, particularly its well-recognized CUDA software ecosystem, gives it a stronger position than AMD to benefit from the continued AI boom.
NVIDIA also appears more efficient at generating profits than AMD. This is because NVIDIA’s return on equity (ROE) of 99.7% exceeds AMD’s ROE of 14.9%.
Image Source: Zacks Investment Research
Finally, NVIDIA appears more attractively valued than AMD. Per the price/earnings ratio, NVDA trades at 23.51 forward earnings compared with AMD’s forward earnings multiple of 64.21.
Image Source: Zacks Investment Research
Therefore, even though both stocks offer strong growth potential, NVIDIA is the better buy now, given its strong competitive positioning, higher profitability, and a more attractive valuation. NVIDIA currently has a Zacks Rank #2 (Buy), while AMD has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
View the Zacks #1 Rank List
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NVIDIA vs. AMD: Only One AI Stock Is a Solid Buy Now
Key Takeaways
As artificial intelligence (AI) spending accelerates, both NVIDIA Corporation (NVDA - Free Report) and Advanced Micro Devices, Inc. (AMD - Free Report) have benefited from strong demand across their Data Center business. However, the two companies differ in growth prospects, profitability, competitive advantages and valuation. So, which one looks like the compelling investment opportunity right now? Let’s take a closer look –
The Bullish Case for NVDA Stock
According to the company’s Aug. 26 press release, NVIDIA reported $96.2 billion in revenues for the fiscal second quarter of 2027, up 106% year over year and 18% quarter over quarter. The Data Center segment primarily drove NVIDIA’s revenues, underscoring the company’s dominant position in AI infrastructure. Data Center revenues were $89 billion, up 117% year over year and 18% sequentially (read more: NVIDIA Surpasses Q2 Earnings and Revenue Estimates).
NVIDIA continues to maintain high profitability along with strong revenue growth, highlighting significant pricing power and operating efficiency. Both GAAP and non-GAAP margins were 75% in the fiscal second quarter, up from around 72.5% a year ago. The company is also converting its rapid revenue growth into even stronger earnings growth, as operating income continues to grow.
Looking ahead, NVIDIA projects fiscal third-quarter 2027 revenues to reach $108 billion, with an estimated range of plus or minus 2%. At the midpoint, this would represent a 12% sequential increase, suggesting that the company’s strong growth momentum isn’t slowing down. What’s more, NVIDIA’s cutting-edge Vera Rubin platform is in full production, positioning the company to capitalize on the next wave of AI infrastructure spending.
The Bullish Case for AMD Stock
AMD’s Data Center revenue growth was impressive in the second quarter of 2026, more than doubling from the year-ago period. Overall, AMD reported revenues of $11.5 billion, up 50% year over year and a 13% rise from the prior quarter, according to the company’s Aug. 4 press release (read more: Advanced Micro Q2 Earnings: How Key Metrics Compare to Wall Street Estimates).
Revenue growth was driven in part by the company’s EPYC server processors. Meanwhile, AMD’s Helios platform has begun its initial ramp-up phase, while Instinct accelerators are scaling rapidly. As a result, AMD expects third-quarter revenues to reach $13 billion, plus or minus $300 million. From the midpoint, this would translate into 41% year-over-year growth and a 13% sequential rise.
AMD also expects stronger Data Center sales during the second half of 2026. Most importantly, AMD expects profitability to improve continuously alongside robust revenue growth. The company projects a solid non-GAAP gross margin of 56% in the third quarter, highlighting its ongoing margin expansion.
NVIDIA or AMD: Which AI Stock Is the Better Buy Now
NVIDIA’s latest blowout quarterly result has reinforced its position as a leading beneficiary of the AI infrastructure boom. Strong Data Center growth, expanding profitability, and the production ramp of Vera Rubin indicate a bullish near-term outlook for NVIDIA. Notably, NVIDIA’s guidance doesn’t include any China-related sales, meaning any possible sales from the region could further boost growth.
At the same time, AMD’s accelerating Data Center business, strong EPYC and Instinct demand, and improving margins provide the company with a solid foundation for continued growth ahead.
However, NVIDIA has repeatedly demonstrated its capability to turn massive AI demand into revenue and earnings growth, while AMD is still trying to expand its market share. NVIDIA’s competitive advantage, particularly its well-recognized CUDA software ecosystem, gives it a stronger position than AMD to benefit from the continued AI boom.
NVIDIA also appears more efficient at generating profits than AMD. This is because NVIDIA’s return on equity (ROE) of 99.7% exceeds AMD’s ROE of 14.9%.
Image Source: Zacks Investment Research
Finally, NVIDIA appears more attractively valued than AMD. Per the price/earnings ratio, NVDA trades at 23.51 forward earnings compared with AMD’s forward earnings multiple of 64.21.
Image Source: Zacks Investment Research
Therefore, even though both stocks offer strong growth potential, NVIDIA is the better buy now, given its strong competitive positioning, higher profitability, and a more attractive valuation. NVIDIA currently has a Zacks Rank #2 (Buy), while AMD has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.