Advanced Micro Devices, Inc. (NASDAQ:AMD) crossed $1 trillion in market value on September 21 after closing roughly 187% higher for 2026. NVIDIA Corporation (NASDAQ:NVDA) was worth about $5.45 trillion as of September 23. The more important difference is valuation. On a common S&P Global basis updated September 24, AMD traded at about 55.6 times forward earnings versus 18.7 times for Nvidia. The challenger carries the richer multiple.
That makes the portfolio choice very different from a year ago. We recently examined why Cathie Wood recently sold about $72.8 million of AMD while buying roughly $53 million of Nvidia, while another analysis asked whether AMD’s headline Nvidia customer wins carry a less obvious cost. The unresolved question is whether AMD’s potential share gains justify paying almost three times Nvidia’s earnings multiple.
AMD now has to grow into the premium
Advanced Micro Devices, Inc. reported second-quarter revenue of $11.5 billion, up 50% year over year, while Data Center revenue more than doubled to $6.7 billion. Non-GAAP gross margin reached 56%, and management expects third-quarter revenue of about $13 billion, implying roughly 41% growth.
Those numbers are excellent. Nvidia’s are still stronger. NVIDIA Corporation generated $96.2 billion of quarterly revenue, up 106%, with Data Center revenue rising 117% to $89.0 billion and gross margin at 75%. Its third-quarter revenue outlook is $108 billion. Investors are therefore paying AMD more per dollar of expected earnings even though Nvidia is growing faster from a much larger base and converting substantially more revenue into gross profit.
AMD’s upside requires real share gains
AMD’s bull case is its smaller base. EPYC server CPUs are gaining ground, Instinct deployments are scaling, and Helios gives AMD a rack-level offering. Anthropic has agreed to deploy up to 2 gigawatts of MI450-series systems, with the first gigawatt expected to begin deployment in the first half of 2027. If ROCm keeps improving and cloud customers increasingly demand a second supplier, AMD can compound earnings faster than its current size suggests.
Nvidia’s bear case is the mirror image. Hyperscaler custom silicon, AMD and other architectures can chip away at a profit pool that has attracted enormous competition. Yet Nvidia retains CUDA, a broader full-stack platform and much higher margins, while its lower forward multiple already allows for more normalization.
Insider Monkey’s Q2 hedge fund database showed 164 funds holding AMD, up from 134 in Q1. Marshall Wace raised its position 3% to about 3.9 million shares. Nvidia ownership increased to 285 funds from 275, while Fisher Asset Management lifted its stake 3% to roughly 90.9 million shares. AMD’s August 31 short interest was 41.7 million shares, 2.57% of float, with 2.49 days to cover.
At these valuations, Nvidia offers the stronger risk-adjusted setup. AMD can still outperform, but it now requires sustained share gains and margin expansion. Nvidia does not need comparable execution merely to justify its lower multiple. Evidence that AMD is closing the software gap while protecting margins would be the clearest reason to reverse that preference.
