Nvidia Poised to Outshine AMD Through 2028 Amid Valuation Gap
The debate between Advanced Micro Device's (AMD) and Nvidia's (NVDA) stocks has been ongoing since the AI arms race began in 2023. For the first three years, Nvidia was the clear winner, outperforming AMD significantly. However, this trend reversed in 2026, with AMD's stock surging by about 115%, while Nvidia's rose only 15%.
Despite AMD's recent growth, experts believe Nvidia will outperform it through 2028. One key factor is Nvidia's faster growth rate. In Q2 of fiscal year 2027, Nvidia's data center revenue grew 117% year over year, compared to AMD's 107%. This significant difference in growth rates makes Nvidia the more attractive investment.
Another important consideration is valuation. AMD trades at a premium to Nvidia, with a forward PE ratio of 62 times earnings. This means that if AMD's stock remains unchanged until the end of 2027, it will likely grow into its current valuation and become reasonably priced. In contrast, Nvidia's stock is undervalued and has significant upside potential.