What separates earnings resilience between NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD)? Both sell AI compute, but a dollar of lost margin has a very different effect on their current profits. The stocks rank first and fifth in our 10 Best AI Infrastructure Stocks to Buy for the Long Term, respectively. See which other stocks made the list.
The same margin shock produces different damage
Nvidia reported $96.22 billion of quarterly revenue and $63.73 billion of GAAP operating income on August 26, a 66.2% operating margin. AMD’s August 4 results showed $11.54 billion of revenue and $1.99 billion of GAAP operating income, a 17.3% margin. These are company-wide figures, covering their respective latest reported quarters.
Hold revenue constant and subtract five percentage points from each margin. Nvidia’s operating income falls 7.5%; AMD’s falls 29.0%. This illustrative stress isolates the starting profit cushion. Actual revenue, research spending and product mix would also change in a downturn. Nvidia has considerably more room to absorb pricing pressure before its operating earnings contract severely.
AMD’s opportunity is the reverse: scaling a smaller profit base can produce faster earnings growth. Its data-center revenue reached $6.7 billion, up 107%, while Nvidia’s reached $89 billion. The challenger can gain from broader customer adoption, but integration costs and competitive pricing can consume the incremental revenue. Our earlier comparison examines how much growth AMD must deliver to challenge Nvidia’s investment case.
A stronger cushion still has a price
At October 15 prices, trailing free-cash-flow multiples were about 41 for Nvidia and 109 for AMD. That price gap makes sustained cash conversion particularly important for AMD; neither multiple turns this one-quarter margin exercise into a return forecast. Cash spending, working capital and equity compensation separate operating profit from what ultimately reaches shareholders.
The opposing risk for Nvidia is that its exceptional profitability attracts custom-chip competition and encourages customers to seek lower computing costs. AMD could become the more compelling operating-growth story if rising utilization and product mix lift margins while Nvidia’s economics normalize.
Insider Monkey’s Q2 2026 holder counts rose to 285 from 275 for Nvidia and to 164 from 134 for AMD. Voyager Global increased Nvidia shares 9%; Southpoint cut AMD shares 6%. Those June positions predate the results. AMD’s September 30 short interest was 2.42% of float, offering little basis for a squeeze-driven thesis.
For resilience today, Nvidia has the larger demonstrated operating cushion. AMD offers greater potential sensitivity to improving margins, accompanied by greater sensitivity to disappointment. The next test is whether its growing data-center business turns more revenue into operating profit and cash.
