Advanced Micro Devices (AMD) has been on a tear lately. Over the past month, the stock has surged about 32%, with a healthy 6.5% gain just in the past week. This momentum comes on the heels of the company’s latest earnings report, which beat Wall Street expectations and reaffirmed investor confidence in AMD’s long-term growth potential, especially in the attractive data center and AI segments. On top of that, positive developments in U.S.-China trade relations have eased investor concerns and provided an additional boost to tech stocks, AMD included.

While AMD stock is trending higher, the conversation inevitably turns to its biggest competitor — Nvidia (NVDA). And when comparing the two, primarily through the lens of long-term AI growth potential and stock valuation, Nvidia may still hold the upper hand. Let’s take a closer look at these semiconductor stocks.

AMD Vs. Nvidia

AMD’s recent performance offers several reasons for optimism. AMD reported first-quarter 2025 revenue of $7.4 billion, marking a 36% year-over-year increase and the fourth straight quarter of accelerating growth. Strong demand for its AI-focused Instinct accelerators, EPYC server chips, and Ryzen processors drove its top line higher.

Data center revenue, the core catalyst of AMD’s business, jumped 57% year-over-year to $3.7 billion. The company witnessed strong adoption of its products and platform among cloud providers. Moreover, the growing demand for AMD Instinct accelerators continues to expand its market share.

AMD saw double-digit growth in its data center AI business in Q1, fueled by increasing shipments of its MI325X accelerators. It’s also preparing to launch its next-generation MI350 series later this year, with the MI400 line already on the roadmap. These advancements should help AMD gain more ground in high-performance computing and AI workloads.

While AMD’s growth outlook remains strong, its recent stock rally has pushed its valuation higher. AMD currently trades at a forward price-earnings (P/E) ratio of 34.4x. Wall Street consensus earnings per share (EPS) projection indicates AMD’s bottom line will grow by 27.5% in 2025 and nearly 48% in 2026, suggesting the valuation is justifiable but not a bargain.

In contrast, Nvidia stock trades at a slightly lower forward P/E ratio of 33.1x. Moreover, its EPS is expected to grow by 38.9% in fiscal year 2026 and 26.3% in 2027. However, Nvidia’s unrivaled dominance in the AI space makes it stand out. The company’s data center business has been growing rapidly and posted $115.2 billion in revenue in fiscal 2025 on the back of solid demand for its AI-focused GPUs.

Moreover, the early success of its new Blackwell platform reflects how strong demand remains. In its first quarter on the market, Blackwell generated $11 billion in sales. While the launch of DeepSeek’s low-cost model raised concerns about the future demand for Nvidia’s high-priced chips, it has not impacted demand as of yet. Further, NVDA’s full-stack approach, combining industry-leading hardware with proprietary software and networking solutions, continues to attract hyperscalers.

With ongoing investments in AI infrastructure and Nvidia’s leadership in the AI segment, the company’s growth engine could continue to run at full steam, at least in the near future.

Analysts Endorse Nvidia Stock

AMD and Nvidia will benefit from long-term trends in AI and high-performance computing. Moreover, these companies face similar headwinds, such as increased export controls affecting business in China. However, Wall Street currently favors Nvidia, with analysts giving it a “Strong Buy” rating compared to a “Moderate Buy” for AMD.

Based on average analyst price targets, Nvidia stock offers a potential upside of about 24% from current levels, while AMD’s upside is closer to 13%.

The Bottom Line

AMD is a solid investment, delivering impressive growth and broadening its AI presence. However, Nvidia appears to be a better buy considering its market leadership in AI, solid adoption of its Blackwell platform, compelling valuation, and bullish outlook from Wall Street analysts.