Home > Comparison > Technology > NVDA vs AMD
The strategic rivalry between NVIDIA Corporation and Advanced Micro Devices, Inc. defines the semiconductor sector’s competitive landscape. NVIDIA operates as a diversified technology leader with a strong emphasis on AI-driven graphics and data center platforms. AMD focuses on high-performance computing and customized processor solutions across consumer and enterprise markets. This analysis will assess which company offers a superior risk-adjusted return, guiding investors seeking sector leadership and innovation in their portfolios.
Table of contents
Companies Overview
NVIDIA and AMD are pivotal players shaping the semiconductor industry’s competitive landscape in 2026.
NVIDIA Corporation: Pioneer in Graphics and AI Computing
NVIDIA dominates the graphics processing unit (GPU) market, generating revenue through gaming GPUs, professional visualization, and high-performance computing platforms. In 2026, it focuses heavily on expanding AI data center solutions and autonomous vehicle platforms, leveraging its software ecosystem to create a robust competitive edge in accelerated computing and virtual environments.
Advanced Micro Devices, Inc.: Innovator in Computing and Graphics
AMD leads in x86 microprocessors and GPUs, catering to desktops, servers, and embedded systems. Its core revenue comes from Ryzen CPUs and Radeon GPUs, alongside semi-custom SoCs for gaming consoles. The company prioritizes enhancing chip performance and broadening its data center footprint, aiming to capture market share with highly integrated computing solutions and scalable server processors.
Strategic Collision: Similarities & Divergences
Both firms pursue innovation in semiconductors but diverge in philosophy: NVIDIA builds a software-hardware ecosystem centered on AI and visualization, while AMD emphasizes open architecture and CPU-GPU integration. Their primary battleground is the data center and high-end computing markets. NVIDIA profiles as a growth-driven, platform-centric giant; AMD presents a value-oriented challenger with a diversified CPU-GPU portfolio.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | NVIDIA Corporation (NVDA) | Advanced Micro Devices, Inc. (AMD) |
|---|---|---|
| Revenue | 130.5B | 34.6B |
| Cost of Revenue | 32.6B | 17.5B |
| Operating Expenses | 16.4B | 13.5B |
| Gross Profit | 97.9B | 17.2B |
| EBITDA | 86.1B | 3.7B |
| EBIT | 84.3B | 3.7B |
| Interest Expense | 247M | 131M |
| Net Income | 72.9B | 4.3B |
| EPS | 2.97 | 2.67 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals the true efficiency and profitability of NVIDIA Corporation and Advanced Micro Devices, Inc. over recent years.
NVIDIA Corporation Analysis
NVIDIA’s revenue surged from $16.7B in 2021 to $130.5B in 2025, with net income expanding from $4.3B to $72.9B. The company sustains strong gross margins near 75%, indicating efficient cost control. Its 2025 net margin of 55.85% demonstrates exceptional profitability and robust momentum, reflecting superior operating leverage and R&D investment.
Advanced Micro Devices, Inc. Analysis
AMD’s revenue grew from $16.4B in 2021 to $34.6B in 2025, while net income increased from $3.2B to $4.3B. Gross margin improved to 49.5%, but net margin remains modest at 12.5%. Despite healthy revenue growth and increased R&D spend, AMD’s profitability lags NVIDIA, reflecting tighter cost management challenges and thinner operating leverage.
Verdict: Scale and Margin Dominance vs. Moderate Growth and Profitability
NVIDIA outpaces AMD significantly in revenue scale, margin expansion, and bottom-line growth. NVIDIA’s ability to convert revenue into profit dwarfs AMD’s, with net margins over four times higher. Investors seeking a high-efficiency, high-margin profile will find NVIDIA’s dominant financial engine more compelling than AMD’s moderate growth and profitability.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the following companies:
| Ratios | NVIDIA Corporation (NVDA) | Advanced Micro Devices, Inc. (AMD) |
|---|---|---|
| ROE | 91.9% | 0% |
| ROIC | 75.3% | 0% |
| P/E | 39.9 | 80.5 |
| P/B | 36.7 | 0 |
| Current Ratio | 4.44 | 0 |
| Quick Ratio | 3.88 | 0 |
| D/E | 0.13 | 0 |
| Debt-to-Assets | 9.2% | 0% |
| Interest Coverage | 329.8 | -28.2 |
| Asset Turnover | 1.17 | 0 |
| Fixed Asset Turnover | 16.16 | 0 |
| Payout ratio | 1.1% | 0% |
| Dividend yield | 0.03% | 0% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios serve as a company’s DNA, exposing hidden risks and operational strengths that numbers alone cannot reveal.
NVIDIA Corporation
NVIDIA demonstrates exceptional profitability with a 91.9% ROE and a robust 55.9% net margin, signaling operational excellence. Its valuation appears stretched, trading at a high P/E of 39.9 and a P/B of 36.7. Shareholders see minimal dividends, as the company reinvests heavily in R&D to fuel growth and innovation.
Advanced Micro Devices, Inc.
AMD posts a modest 12.5% net margin but registers zero ROE and ROIC, indicating weak profitability and capital returns. The stock trades at a very high P/E of 80.5, suggesting overvaluation. AMD offers no dividends, focusing resources on R&D for future growth, yet its efficiency metrics remain unfavorable or unavailable.
Premium Valuation vs. Operational Safety
NVIDIA offers superior operational profitability and capital efficiency despite a premium valuation. AMD shows weaker returns and stretched valuation without financial stability indicators. Investors seeking operational safety and proven returns may prefer NVIDIA’s profile, while AMD fits those prioritizing speculative growth potential.
Which one offers the Superior Shareholder Reward?
I observe NVIDIA’s conservative dividend yield around 0.03%, paired with a minimal payout ratio near 1%. Its buyback program, fueled by robust free cash flow of 2.5B per share, amplifies total returns sustainably. AMD pays no dividend, instead reinvesting heavily in R&D and growth, supported by a solid free cash flow of 3.4B per share. However, its lack of buybacks limits immediate shareholder reward. NVIDIA’s balanced distribution—modest dividends plus intense buybacks—offers a more attractive and sustainable total return profile for 2026 investors.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of NVIDIA Corporation and Advanced Micro Devices, Inc.:
NVIDIA excels in profitability with top ROE and ROA scores (5 each), while AMD posts moderate scores (3 each). Both show moderate DCF and debt-to-equity scores of 3, indicating comparable valuation discipline and financial risk. NVIDIA’s valuation metrics (PE/PB scores at 1) flag potential overpricing, contrasting with AMD’s slightly better price-to-book score, reflecting a more balanced valuation approach. Overall, NVIDIA leverages operational excellence, whereas AMD offers a steadier but less powerful financial profile.
Bankruptcy Risk: Solvency Showdown
NVIDIA’s Altman Z-Score of 71.4 far exceeds AMD’s 18.0, highlighting a stronger buffer against bankruptcy risks in this economic cycle:
Both companies reside comfortably in the safe zone, but NVIDIA’s overwhelming margin suggests superior financial stability and resilience over the long term.
Financial Health: Quality of Operations
AMD edges out NVIDIA with a Piotroski F-Score of 7 against 6, signaling marginally stronger internal financial health and operational efficiency:
While both firms are in good standing, AMD’s higher score reduces red flags, implying a more robust balance of profitability, liquidity, and leverage metrics. This subtle edge favors AMD in assessing financial quality.
How are the two companies positioned?
This section dissects NVIDIA and AMD’s operational DNA by comparing revenue distribution and internal dynamics. The goal is to confront their economic moats and identify which model delivers the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how NVIDIA Corporation and Advanced Micro Devices diversify their income streams and where their primary sector bets lie:
NVIDIA dwarfs AMD with a dominant Data Center segment at $115B in 2025, anchoring its revenue heavily there. AMD shows a more balanced mix, with Client ($7B), Data Center ($12.6B), Embedded ($3.6B), and Gaming ($2.6B) segments all contributing significantly. NVIDIA’s concentration signals infrastructure dominance but exposes it to sector-specific risk. AMD’s diversification reduces exposure but may limit ecosystem lock-in advantages seen in NVIDIA’s strategy.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of NVIDIA Corporation and Advanced Micro Devices, Inc.:
NVIDIA Strengths
- High profitability with 55.85% net margin
- Strong ROE of 91.87% and ROIC of 75.28%
- Low debt-to-assets at 9.2% and strong interest coverage
- Diverse revenue streams including Data Center and Gaming
- Significant global presence, especially in the U.S. and Asia
- Efficient asset turnover metrics
AMD Strengths
- Positive net margin at 12.51%
- Favorable debt metrics with zero debt-to-assets
- Presence in multiple segments: Client, Data Center, Embedded, Gaming
- Global footprint including the U.S., China, and Japan
- Reasonable interest coverage ratio
NVIDIA Weaknesses
- High valuation multiples: PE 39.9 and PB 36.66
- Elevated weighted average cost of capital at 14.73%
- Unfavorable current ratio of 4.44 despite good quick ratio
- Minimal dividend yield at 0.03%
AMD Weaknesses
- Zero ROE and ROIC indicating low capital efficiency
- Unfavorable liquidity ratios with zero current and quick ratios
- High valuation with PE at 80.54
- Lack of dividend yield
- Poor asset turnover metrics
NVIDIA’s strengths lie in robust profitability, capital efficiency, and global diversification, though it faces valuation and liquidity concerns. AMD shows diversification and solid debt management but struggles with profitability and efficiency metrics, indicating challenges in capital allocation and operational leverage.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competitive erosion:
NVIDIA Corporation: Dominating with Technological Intangibles
NVIDIA’s moat stems primarily from intangible assets and innovation leadership. Its 60%+ ROIC above WACC confirms superior capital efficiency and margin strength. Expanding AI and data center products will likely deepen this moat in 2026.
Advanced Micro Devices, Inc.: Battling Cost Efficiency and Market Penetration
AMD’s moat hinges on competitive pricing and semi-custom solutions, contrasting NVIDIA’s innovation edge. Yet its negative ROIC trend signals value destruction. Future growth depends on regaining profitability amid fierce competition and new market entries.
Innovation Leadership vs. Cost Competition
NVIDIA commands a wider and more durable moat with rising ROIC and exceptional profitability metrics. AMD’s declining returns and value destruction leave it less equipped to defend market share long-term.
Which stock offers better returns?
The past year shows sharply divergent price moves for NVIDIA and AMD, with NVIDIA’s growth slowing recently as AMD gains momentum in trading activity.
Trend Comparison
NVIDIA’s stock surged 105.31% over the past 12 months, reflecting a strong bullish trend with decelerating momentum and a high volatility level (32.12 std deviation).
AMD’s stock rose 26.72% in the same period, maintaining a bullish trend with accelerating momentum and even higher volatility (41.61 std deviation).
NVIDIA delivered the highest total gain, but AMD’s accelerating trend and buyer dominance suggest a dynamic shift in relative market performance.
Target Prices
Analyst consensus points to strong upside potential for both NVIDIA and AMD compared to current prices.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| NVIDIA Corporation | 140 | 352 | 265.21 |
| Advanced Micro Devices, Inc. | 225 | 380 | 291.56 |
Both semiconductors show analyst targets well above current prices, suggesting optimism about growth prospects despite recent market volatility.
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How do institutions grade them?
Here are the latest institutional grades for NVIDIA Corporation and Advanced Micro Devices, Inc.:
NVIDIA Corporation Grades
Below are recent grades assigned to NVIDIA Corporation by reputable grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Jefferies | maintain | Buy | 2026-01-16 |
| Mizuho | maintain | Outperform | 2026-01-09 |
| Truist Securities | maintain | Buy | 2025-12-29 |
| Stifel | maintain | Buy | 2025-12-29 |
| Baird | maintain | Outperform | 2025-12-26 |
| Bernstein | maintain | Outperform | 2025-12-26 |
| B of A Securities | maintain | Buy | 2025-12-26 |
| Truist Securities | maintain | Buy | 2025-12-19 |
| Tigress Financial | maintain | Strong Buy | 2025-12-18 |
| Morgan Stanley | maintain | Overweight | 2025-12-01 |
Advanced Micro Devices, Inc. Grades
This table shows recent grades assigned to Advanced Micro Devices, Inc. by established grading firms.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | maintain | Overweight | 2026-01-30 |
| Piper Sandler | maintain | Overweight | 2026-01-26 |
| UBS | maintain | Buy | 2026-01-26 |
| Bernstein | maintain | Market Perform | 2026-01-21 |
| Keybanc | upgrade | Overweight | 2026-01-13 |
| Truist Securities | maintain | Buy | 2025-12-19 |
| Cantor Fitzgerald | maintain | Overweight | 2025-12-16 |
| Morgan Stanley | maintain | Equal Weight | 2025-11-12 |
| Wedbush | maintain | Outperform | 2025-11-12 |
| Rosenblatt | maintain | Buy | 2025-11-12 |
Which company has the best grades?
NVIDIA consistently receives strong buy and outperform ratings, reflecting high confidence from analysts. AMD’s grades trend mostly to overweight and buy, with some market perform ratings. NVIDIA’s superior grades suggest stronger institutional endorsement, which may influence investor sentiment positively.
Risks specific to each company
In the 2026 market environment, these categories reveal critical pressure points and systemic threats facing NVIDIA Corporation and Advanced Micro Devices, Inc.:
1. Market & Competition
NVIDIA Corporation
- Dominates AI and gaming GPUs with strong market cap of $4.39T, but faces intense competition and high valuation risks.
Advanced Micro Devices, Inc.
- Smaller market cap of $394B; competes aggressively in CPUs and GPUs but struggles with lower profitability and market share.
2. Capital Structure & Debt
NVIDIA Corporation
- Low debt-to-equity ratio (0.13) and strong interest coverage (341x) ensure financial stability and flexibility.
Advanced Micro Devices, Inc.
- No debt reported, indicating minimal leverage but potential underutilization of capital structure for growth.
3. Stock Volatility
NVIDIA Corporation
- High beta of 2.31 signals elevated stock volatility, increasing investor risk during market downturns.
Advanced Micro Devices, Inc.
- Beta of 1.95 suggests significant volatility though less than NVIDIA, still sensitive to tech sector cycles.
4. Regulatory & Legal
NVIDIA Corporation
- Faces regulatory scrutiny over acquisitions and antitrust in AI and semiconductor sectors globally.
Advanced Micro Devices, Inc.
- Regulatory risks moderate; industry-wide export controls and IP litigation remain concerns.
5. Supply Chain & Operations
NVIDIA Corporation
- Relies on complex global supply chains exposed to geopolitical risks and component shortages.
Advanced Micro Devices, Inc.
- Similar supply chain vulnerabilities; smaller scale limits negotiating power but maintains diversified sources.
6. ESG & Climate Transition
NVIDIA Corporation
- Increasing pressure to reduce carbon footprint in data centers and manufacturing; ESG initiatives underway.
Advanced Micro Devices, Inc.
- ESG focus growing; lags NVIDIA in transparency and climate strategy disclosure.
7. Geopolitical Exposure
NVIDIA Corporation
- Substantial exposure to US-China tensions impacting semiconductor exports and operations in Asia.
Advanced Micro Devices, Inc.
- Also heavily impacted by geopolitical tensions; dependency on Taiwan and China for manufacturing.
Which company shows a better risk-adjusted profile?
NVIDIA’s strongest risk is its elevated stock volatility and high valuation multiples. AMD’s principal risk lies in weaker profitability and operational metrics. NVIDIA exhibits a better risk-adjusted profile, supported by its robust balance sheet and dominant market position, despite valuation and volatility concerns. Recently, NVIDIA’s superior ROIC (75%) versus AMD’s zero highlights its operational efficiency advantage amid sector headwinds.
Final Verdict: Which stock to choose?
NVIDIA’s superpower lies in its durable competitive advantage, driven by a rapidly growing ROIC far exceeding its cost of capital. It operates as a highly efficient cash machine with impressive profitability. The main point of vigilance is its lofty valuation, which could pressure returns. NVIDIA suits aggressive growth portfolios seeking long-term dominance.
Advanced Micro Devices boasts a strategic moat rooted in innovation and recurring revenue streams, supporting steady growth. Compared to NVIDIA, AMD offers a more moderate risk profile but struggles with value creation and profitability metrics. It fits Growth at a Reasonable Price (GARP) investors who prioritize growth with measured risk exposure.
If you prioritize exceptional value creation and market leadership, NVIDIA outshines with its robust economic moat and superior profitability. However, if you seek growth potential with better downside stability and a less demanding valuation, AMD offers a compelling scenario. Each appeals to distinct investor profiles balancing growth ambitions and risk tolerance.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of NVIDIA Corporation and Advanced Micro Devices, Inc. to enhance your investment decisions:
