AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (2024)

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (1)

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  • By Lucien Bechard
  • Updated February 29, 2024

8 min read

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AMD vs Nvidia stock – two semiconductor giants executing their business plans to be leaders at the bleeding edge of technology. These two microchip leaders are trading near all-time highs. Is AMD or NVDA a better buy?

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AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (3)

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Table of Contents

  • AMD vs Nvidia Stock Introduction
    • Modern Products: AMD vs Nvidia Stock
    • Financials: AMD vs NVDA Stock
    • Quarterly Results
  • Which Is Better Nvidia or AMD Stock?
    • Stock Charts In Focus
    • TrendSpider Charting Platform
    • Final Thoughts: AMD vs Nvidia Stock

AMD vs Nvidia Stock Introduction

The AMD dynasty was founded in 1969 by Jerry Sanders and seven others from Fairchild Semiconductor – the same company that the founders of Intel left in 1968. Sanders would serve as CEO until 2002, overseeing AMD through its IPO in 1972 and three decades of Moore’s Law.

By the time Lisa Su took the reigns in 2014, AMD was quite a mess. In 2015, AMD had negative $412 million in their equity account, meaning they had more liabilities than assets on their balance sheet.

The balance sheet transformation that Su has led puts her in the conversation for the greatest non-founder CEO of all time. And if that’s not enough, the way AMD executes in both the GPU and CPU markets should seal the deal.

This rivalry truly runs deep when it comes to AMD vs Nvidia stock. Nvidia was founded in 1993 by Jensen Huang, a former AMD chip designer.

Huang confounded Nvidia and two others from Sun MicroSystems with the vision of personal computers becoming devices for games and multimedia.

In 1999, they invented the Graphics Processing Unit, or GPU, and had their IPO. Jensen Huang is still CEO today.

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (4)

$NVDA stock has crushed the returns compared to the SP500, its peers, AND technology stocks. Semis are the future, and investors seem to be well aware of this report courtesy of StockRover, the best value research tool for retail investors.

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Modern Products: AMD vs Nvidia Stock

As the GPU inventor, Nvidia owns that market with about 80% market share. They have specific chips for each category they serve. For example, theirGeForce products are for gaming, and the AGX products are for self-driving cars, medical devices, or robotics.

Nvidia believes and is proving itself to be correct that the GPU will be an essential element for AI (including self-driving vehicles), VR, and modern data centers.

Any of the exciting technological advances currently being invented. These markets should help Nvidia lock in many years of growth in the future.

AMD released new 7nm chips (the smaller the transistor, the more transistors can fit on a chip, furthering Moore’s law) in 2019; around the same time, Intel released their first 10nm microchips across their entire product line.

They have theRyzen family of products in personal computing, Radeon GPUs for gaming, and EPYC for the data center. AMD has taken a little market share from Nvidia in the GPU market over the past year.

And they’re taking market share from Intel in computing and data centers. AMD is ON FIRE! Check out the fundamental and technical stats on $AMD below.

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (8)

Financials: AMD vs NVDA Stock

AMD has been executing its business plan to near perfection. But we shouldn’t lose track of NVDA’s financials. Nvidia is a cash machine with one of the best balance sheets I have ever seen.

As of January 26th, they had $10.9b in cash and equivalents against $1.9b in current liabilities. NVDA generated $4.27b in free cash flow last year while spending $2.86b on research and development and $550 million in capital expenditures.

Year over year, however, last year saw a significant downturn in revenue and EPS, down 6.8% and 31.8%, respectively.

As mentioned above, AMD has massively improved its balance sheet over the past several years to have now a debt: equity ratio below 1 (0.93) as of March 28th.

In the last fiscal year, AMD grew revenue by 3.95% while EPS was down slightly. AMD generated $276 million in free cash flow last year while spending $1.5b on R&D and Capex of $217m.

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (9)

AMD vs Nvidia comparison chart – AMD dividend-adjusted return vs NVDA. On the lower portion of the chart, we see Pice to Sales displayed. Report fromstockrover

Quarterly Results

AMD announced strong first-quarter results on April 28th and sees continued growth this year despite the COVID-19 headwinds. Nvidia will announce its Q1 results on May 21st.

Another consideration for an investor looking at these two companies is that NVDA pays a small dividend ($.64/year is about a .22% yield). This reflects the strong free cash flow that NVDA generates and confidence in its ability to continue generating plenty of cash.

One of my favorite ways to compare two growth companies is to compare their PEG ratios, which divide a company’s PE by their growth rate.

A PEG below one would be considered a strong buy. AMD’s PEG is around 3.5, compared to NDVA’s 4.7, suggesting full pricing for each stock.

AMD’s growth has been exceptional. However, NVDA continues to get a premium because of its incredible balance sheet and long free cash flow generation history.

Which Is Better Nvidia or AMD Stock?

Which is better in the Nvidia or AMD debate? Nividia has owned AMD when it comes to the high-end GPU market. In other words, NVDA wins over more expensive graphic cards. NVDA is more efficient than AMD and has more bang for its buck regarding price versus what you get.

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (10)

Stock Sectors List

The Bullish Bears Team created a list of the 11 stock sectors. Our list includes the top companies to trade within each sector, based on market cap. This list is helpful to use when choosing stocks to trade.

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Stock Charts In Focus

Looking at AMD vs Nvidia, you can’t deny the momentum of these stocks. AMD was the best-performing stock in the S&P 500 in 2018 and 2019.

They had reached an all-time high of $59.27 on February 19th, the same date as the all-time high for the S&P before the COVID-related selloff. After the selloff, AMD rallied to retest those highs, forming a cup.

It has since pulled back somewhat and is now forming a handle, a high-probability setup for a breakout. (Learn more about cup and handle patterns).

TrendSpider Charting Platform

Our favorite charting platform, Trendspider, provided the stock chart. *Open your favorite charting tool to view the current price of $AMD*

NVDA set its all-time high at the same time in February at $316.32 and is presently trading just below that level. It also looks poised for a breakout after several days of consolidating between $280 and $300.

Macro factors drive the market in many ways, but a strong earnings report on May 21st will likely push NVDA to new all-time highs. Check out the huge inverse head and shoulders on the $NVDA daily chart.

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (11)

Consult your data before ever pulling the trigger on an investment or trade! This report is provided byStock Rover.

Final Thoughts: AMD vs Nvidia Stock

The microchip space has traditionally been one of the most cyclical industrysectorsin the market.

However, as the world has become increasingly dependent on digital data, chips have become almost a consumer staple.

AI, self-driving cars, online gaming, VR, and data centers are strong long-term secular trends that will provide the best semiconductor companies with a long runway for growth. Intel is the largest company in the space, but AMD and NVDA are taking market share from INTC.

In my opinion, both companies are buys on pullbacks. Regarding AMD vs. Nvidia, I favor AMD for their long-term growth prospects and the momentum they have behind them over the past couple of years. Should you buy AMD right now if you are hungry for more reading?

But NVDA should be a good long-term investment as well. As with anything, risk management is key, and staying up on fundamentals and the technicals willgive you a healthy approach.

Let us know in the comments who you got in the semiconductor industry, and don’t forget to check out our stock training program to increase your knowledge of the charts!

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AMD vs Nvidia Stock Analysis - Which Is Better to Trade? (2024)

FAQs

AMD vs Nvidia Stock Analysis - Which Is Better to Trade? ›

Considering their current positions, these projections would see AMD's stock rise 99% and Nvidia's 41% by fiscal 2026. Alongside heavy investment in AI and potentially more room to run, AMD is the better AI stock over Nvidia and a screaming buy this month.

Is it better to invest in Nvidia or AMD? ›

Nvidia's strong financial performance and market dominance suggest it may be a more favorable investment option compared to AMD. Nvidia exhibits superior financial metrics and dominates the data center market.

Is AMD or Nvidia better value? ›

Price. If having the highest frame rate possible is important to you, go with AMD. If we're comparing frame rates per dollar, AMD wins; if you don't plan to use ray tracing and you don't see yourself doing much beyond gaming, AMD has a better value.

Does AMD make more money than Nvidia? ›

Comparisons Between AMD and Nvidia

In the last 12 months (LTM), Nvidia has reached revenue of $60.9 billion. By comparison, AMD's LTM revenue has totaled a more modest $22.6 billion. It's worth remembering that Nvidia has already set revenue guidance of approximately $24 billion for the next quarter.

Is AMD a good stock to trade? ›

Advanced Micro Devices has 33.91% upside potential, based on the analysts' average price target. Is AMD a Buy, Sell or Hold? Advanced Micro Devices has a conensus rating of Strong Buy which is based on 27 buy ratings, 7 hold ratings and 0 sell ratings.

Is AMD a long-term buy? ›

The company has an ocean of opportunity ahead of it, with a rapidly growing AI market that will give AMD every opportunity to grab a piece. Also, market volatility has returned, and shares are down nearly 20% over the past month. I'll explain why this is a stellar buying opportunity for long-term investors.

Is Nvidia a safe long term investment? ›

Nvidia (NVDA 1.27%) is a prime example of what a successful buy-and-hold investment can deliver over the long run. An investor who put $10,000 into Nvidia stock a decade ago and held on would be sitting on a position worth more than $1.8 million right now and more than $1.9 million with dividends reinvested.

Why people buy Nvidia instead of AMD? ›

Some software runs better on Nvidia GPUs, some software runs better on AMD GPUs. Nvidia's drivers are generally more stable (I think that some people exaggerate the extent of this based on past experiences - AMD's drivers are a lot more stable than they used to be, though probably still slightly inferior to Nvidia).

Why choose AMD over Nvidia? ›

The most basic difference between AMD GPUs and Nvidia GPUs is that Nvidia chips tend to be more powerful, especially at the high-end, while AMD cards offer better value at lower price points and a more friendly user interface.

What stock is better than Nvidia? ›

While Nvidia may be fine, I'm more confident in Amazon, Microsoft, and Alphabet's ability to sustain their businesses over the long term due to their cloud computing segments. While these aren't the largest parts of their businesses, they are critical components that will provide consistent subscription revenue.

Who is Nvidia's biggest rival? ›

Nvidia has identified Chinese tech company Huawei as one of its top competitors in various categories such as chip production, AI and cloud services.

Why is AMD stock lower than Nvidia? ›

Optimism over how the chipmaker will benefit from artificial intelligence is seen as overblown, suggesting recent gains could be at risk. Not only is AMD expected to grow slower than Nvidia — whose processing chips continue to be viewed as the gold standard — but the stock is much more expensive.

Why is AMD a strong buy? ›

Semiconductor chipmaker Advanced Micro Devices (AMD -0.31%) has benefited from the rise of artificial intelligence (AI). Demand for the company's AI-tailored chips spurred its stock to skyrocket from under $100 per share last year to a 52-week high of $227.30 in March.

Why is AMD trading lower? ›

Shares of computer processor maker AMD (NASDAQ:AMD) fell 8.7% in the morning session after the company reported first quarter results: its inventory levels materially increased, and revenues in its gaming and embedded segments fell by more than 45% year on year (the market is less focused on these divisions, however, ...

Is AMD a buy hold or sell? ›

AMD stock has received a consensus rating of buy. The average rating score is and is based on 83 buy ratings, 15 hold ratings, and 0 sell ratings. What was the 52-week low for AMD stock? The low in the last 52 weeks of AMD stock was 93.12.

Is AMD an undervalued stock? ›

In addition, AMD's momentum from sequential to year-over-year growth in Q4 also gives confidence to analysts and investors. AMD is currently among the most undervalued growth stocks, signaling a buy movement for those who want to invest in the company.

Can AMD stock grow like Nvidia? ›

Over the next five years, AMD should be able to slowly accumulate market share. However, it looks unlikely to replicate Nvidia's explosive growth. For AMD, AI chips are shaping up to be an important -- but probably not transformational -- part of its overall business.

Is it worth investing Nvidia? ›

Nvidia stock boasts a best-possible score of 99 on both its Composite Rating and EPS Rating. Its Relative Strength Rating of 98 also shows that it outperforms the vast majority of stocks in the Investor's Business Daily database. Nvidia also is one of the Magnificent Seven stocks that led the 2023 stock rally.

Will AMD be the next Nvidia? ›

AMD is still a promising semiconductor play, but its broader diversification, slower growth rates, and lower market share should prevent it from becoming the "next Nvidia" over the next few years.

Would Nvidia ever buy AMD? ›

Regulators would never allow it. Whenever you as a major corporation buy a company you must submit a request to regulatory bodies to approve the merger. This particular merger is absolutely not going to happen as AMD is the only competition that Nvidia has in its primary market.

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