AMD or Nvidia: Which AI Chip Stock Would I Buy With $1,000 Today?
The leading GPU makers are two of the top AI investments in the market.
AMD and Nvidia are among the largest competitors in the AI processor industry. Broadcom (AVGO) is another player, but its focus is different. Nvidia and AMD both design powerful general-purpose chips, while Broadcom creates highly specialized computing units for specific AI workloads. AMD's stock price has more than doubled this year, outperforming Nvidia, which is nearly flat.
To decide between the two for a $1,000 investment, let's look at the numbers. AMD's data center revenue grew 97% year over year to $8.5 billion in Q3. Nvidia's data center revenue grew 117% year over year to $89 billion in Q2. Despite AMD's impressive revenue, Nvidia's data center revenue is 10 times larger, and it continues to grow faster than AMD.
However, Nvidia's overall business is more dependent on the data center segment. If data center spending slows, Nvidia could face challenges, whereas AMD's other segments contribute more significantly to its results. Despite this, Nvidia still has the growth edge. Interestingly, AMD's stock has surged while Nvidia's has stagnated, revealing pricing discrepancies.
In 2026, both stocks are expected to grow similarly, but Nvidia's stock trades at 13 times next year's earnings, while AMD trades at 30 times. This makes Nvidia a bargain compared to AMD. Therefore, considering AMD's strong performance and Nvidia's growth potential at a lower price, Nvidia appears to be the better choice for a $1,000 investment.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
