AMD Hits $1 Trillion Valuation, But Nvidia Outperforms Expectations
Advanced Micro Devices (AMD) has seen its market value surge to over $1 trillion for the first time, capping off a year that saw the stock rise by nearly 190%. This milestone comes after AMD's second-quarter revenue hit a record $11.5 billion, up 50% from last year.
Nvidia (NVDA), on the other hand, has had a solid year with a gain of about 22%, but its stock hasn't reached an all-time high since mid-May. Despite being significantly larger than AMD and having faster growth, Nvidia's price-to-earnings ratio is only about 15 times its fiscal 2028 estimate.
According to analysts, investors who missed out on Nvidia in 2005 are now seeing a new phase of growth - 'Act 2' - as the global rollout of AI technologies begins. In contrast, AMD's price-to-earnings ratio is about 40 times its 2027 consensus estimate.
Nvidia's CFO Colette Kress expects revenue to grow by approximately 70% in fiscal 2028, a growth constrained by supply, not demand. CEO Jensen Huang stated that the company would have even higher demand without this constraint.
With AMD already at an elevated price-to-earnings ratio and investors expecting further growth next year, some analysts predict Nvidia will outperform AMD over the next 12 months.