AMD Surpassed Nvidia in Stock Growth Last Year: What’s Next for 2026?
This past year marked the first time since 2019 that Advanced Micro Devices (AMD) outpaced Nvidia in stock performance. AMD and Nvidia are two leading chipmakers in a competitive market. While Nvidia has typically enjoyed greater profitability, AMD’s recent resurgence has drawn investor attention.
AMD and Nvidia: A Comparative Overview
In the past five years, Nvidia’s stock skyrocketed by over 1,300%. In contrast, AMD’s shares only increased by 160%. However, a shift occurred last year. AMD’s stock surged by 77%, eclipsing Nvidia’s 39% growth.
This raises an important question: Will AMD continue this upward trend into 2026?
Key Factors Influencing AMD’s Growth
- Technological Partnerships: AMD is gaining traction, with notable companies like OpenAI and IBM adopting its chips.
- Future Projections: CEO Lisa Su anticipates annual revenue growth exceeding 35% over the next three to five years.
Current Market Position
As of now, AMD has a market capitalization of approximately $380 billion. In comparison, Nvidia’s market cap stands near $4.5 trillion—almost 12 times more than AMD. This discrepancy suggests potential for AMD to experience significant gains in the near future.
Profitability and Valuation Considerations
Despite AMD’s smaller size, Nvidia’s per-share profits render it a more attractive investment at face value. Nvidia’s forward price-to-earnings (P/E) multiple is about 24, while AMD’s is higher at 37. Investors need to weigh overall profitability when considering stock investments.
| Company | Market Cap | Current Price | P/E Ratio | Gross Margin |
|---|---|---|---|---|
| AMD | $378B | $19.67 | 37 | 44.33% |
| Nvidia | $4.5T | $182.93 | 24 | 70.05% |
Looking Ahead: AMD vs. Nvidia in 2026
Choosing between AMD and Nvidia remains challenging. AMD offers scalability and potential for growth, especially if its earnings improve significantly. Meanwhile, Nvidia leads the AI chip market and benefits from robust AI spending.
While AMD might outperform Nvidia this year due to investor interest in its AI chip initiatives, Nvidia’s established market position and profit potential cannot be overlooked. As AMD continues to expand, it could very well mark the beginning of a significant rally for the company.
