AMD Beats Nvidia in 1-Month Gains, But Which AI Stock Do Analysts Like Best?

Artificial Intelligence technology concept by NicoEINino via Shutterstock

Easing recession concerns and a cooling of U.S.-China trade tensions have given a boost to leading artificial intelligence (AI) stocks, including Advanced Micro Devices (AMD) and Nvidia (NVDA). Over the past month, AMD stock has surged approximately 21.5%, outperforming Nvidia’s more modest, yet still strong, 14.4% gain.

Besides an improving macroeconomic backdrop, AMD’s recent surge can be traced back to its strong Q1 earnings report that beat Wall Street estimates. Moreover, the company’s strength in the data center business and solid demand for its AI-driven Instinct accelerators provide a solid foundation for long-term growth.

AMD posted revenue of $7.44 billion in Q1, up 36% year-over-year. That follows an increase of about 24% in Q4 2024, 18% in Q3, and 9% in Q2. The acceleration in its top-line growth rate reflects growing demand for its products, including its Instinct chips, EPYC server processors, and Ryzen desktop CPUs.

AMD’s data center business has been a bright spot. The segment registered a 57% year-over-year increase in revenue to $3.7 billion. This growth was driven by strong demand for its server CPUs, particularly the latest 5th Gen EPYC Turin processors, alongside continued strength from the 4th Gen EPYC chips.

Equally notable is AMD’s continued push into the AI space. The company experienced significant double-digit growth in its data center AI business during the first quarter, driven by rising shipments of its MI325X AI accelerators.

Looking ahead, AMD is accelerating the production of its next-gen MI350 chip. Further down the pipeline is the MI400 series, which AMD plans to debut in 2026, strengthening its position in high-performance computing. Furthermore, AMD’s comprehensive AI portfolio, spanning GPUs, CPUs, software, and full-rack systems, positions the company for sustained growth and could drive its share price higher.

That said, Nvidia remains the dominant player in the AI space. The strong demand for its industry-leading AI hardware positions it well to deliver explosive growth. Nvidia generated $115.2 billion in total revenue in fiscal 2025, led by strong momentum in its data center business. This momentum in NVDA’s business is showing no signs of slowing down, with Q1 fiscal 2026 revenue coming in at $44.1 billion, up 69% from the prior year.

A major driver of Nvidia’s growth has been the rapid deployment of its Blackwell GPU architecture, which contributed about 70% of its Q1 data center compute revenue. Cloud providers are scaling up their AI infrastructure using Blackwell GPUs, and the momentum is expected to continue with the upcoming GB300 chips. Sampling has already begun, and production shipments are expected later this quarter.

In short, while AMD is gaining traction and capturing market share with its aggressive AI push, Nvidia’s large-scale, strong product demand and innovation pipeline, along with its established dominance in the AI infrastructure market, make it a top pick in the AI space.

The recent buying in AMD and Nvidia stock has driven their valuation higher. AMD stock currently trades at a forward earnings multiple of 44.8x, a relatively high ratio. However, its high multiple is supported by strong earnings growth forecasts. Wall Street analysts expect AMD’s earnings per share (EPS) to grow about 21% in 2025 and accelerate to nearly 54% in 2026. That kind of growth helps justify the premium valuation, but it doesn’t scream “bargain.”

On the other hand, Nvidia is trading at a lower forward P/E ratio of 39.5x. Even more compelling, Nvidia’s earnings are projected to rise by 36.5% in fiscal 2026 and 32.3% in 2027.

Overall, Nvidia stock currently offers a more attractive balance of valuation and earnings momentum than AMD.

As the race to build out AI infrastructure accelerates, both Nvidia and AMD stand to gain. However, Wall Street sentiment remains tilted in favor of Nvidia. The chipmaker currently holds a “Strong Buy” consensus rating from analysts, compared to AMD’s more cautious “Moderate Buy” recommendation.

The average price target further supports this preference. While AMD’s stock price has already surpassed the average analyst price target, suggesting limited near-term upside, Nvidia’s shares still offer room to run. Based on an average price target of $176.62, analysts see approximately 15% upside potential from current levels.

On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com