Nvidia vs. AMD: Which Is the Better AI Chip Stock for 2026?

Core Viewpoint - The competition between Nvidia and AMD in the AI infrastructure market is intensifying, with AMD showing strong performance in 2025 and potential for further growth in 2026 [1][3]. Nvidia's Position - Nvidia holds over 90% market share in the data center GPU space, benefiting from its established CUDA software platform, which is crucial for training large language models [3][5]. - Nvidia's stock is trading at a forward P/E of 24, lower than AMD's 34, and it has experienced faster revenue growth, with a 62% increase last quarter compared to AMD's 36% [5]. - The company has a market capitalization of $4,433 billion and a gross margin of 70.05% [4]. AMD's Potential - AMD's data center revenue is significantly lower than Nvidia's, but capturing market share in the AI infrastructure space could lead to substantial growth [6]. - AMD has established a niche in the inference market, where it can compete more effectively against Nvidia, as the inference market is expected to grow larger than the training market [7]. - AMD has partnered with OpenAI, which includes a potential 10% stake in AMD and a supply agreement for up to six gigawatts of GPUs, valued at over $200 billion [9][10]. - AMD aims for over 35% compound annual revenue growth over the next three to five years, with more than 60% growth in data center revenue and an 80% increase in AI revenue [11]. Conclusion - Both Nvidia and AMD are expected to perform well in 2026, but AMD may have the edge due to its partnerships and growth potential in the AI market [13].