Compare NVIDIA Corporation (NVDA) vs Advanced Micro Devices, Inc. (AMD) Stock

NVIDIA Corporation (NVDA) offers the better valuation at 36.2x trailing P/E (21.9x forward), making it the more compelling value choice. Analysts rate NVIDIA Corporation (NVDA) a "Buy" — based on 79 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, NVIDIA Corporation (NVDA) is the cheapest at 36.2x versus Advanced Micro Devices, Inc. at 75.6x. On forward P/E, NVIDIA Corporation is actually cheaper at 21.9x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: NVIDIA Corporation wins at 0.23x versus Advanced Micro Devices, Inc.'s 5.72x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, NVIDIA Corporation (NVDA) delivered a total return of +1181%, compared to +131.8% for Advanced Micro Devices, Inc. (AMD). A $10,000 investment in NVDA five years ago would be worth approximately $128K today (assuming dividends reinvested). Over 10 years, the gap is even starker: NVDA returned +225.3% versus AMD's +92.6%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), NVIDIA Corporation (NVDA) is the lower-risk stock at 1.73β versus Advanced Micro Devices, Inc.'s 2.08β — meaning AMD is approximately 21% more volatile than NVDA relative to the S&P 500. On balance sheet safety, Advanced Micro Devices, Inc. (AMD) carries a lower debt/equity ratio of 7% versus 7% for NVIDIA Corporation — giving it more financial flexibility in a downturn.

NVIDIA Corporation (NVDA) is the more profitable company, earning 55.6% net margin versus 12.5% for Advanced Micro Devices, Inc. — meaning it keeps 55.6% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: NVDA leads at 60.4% versus 10.7% for AMD. At the gross margin level — before operating expenses — NVDA leads at 71.1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, NVIDIA Corporation (NVDA) is the more undervalued stock at a PEG of 0.23x versus Advanced Micro Devices, Inc.'s 5.72x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, NVIDIA Corporation (NVDA) trades at 21.9x forward P/E versus 29.5x for Advanced Micro Devices, Inc. — 7.7x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for NVDA: 52.9% to $271.00.

None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.

For long-horizon retirement investors, NVIDIA Corporation (NVDA) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (+225.3% 10Y return). Advanced Micro Devices, Inc. (AMD) carries a higher beta of 2.08 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (NVDA: +225.3%, AMD: +92.6%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.