The Motley Fool·2026-01-21 02:15Group 1: Stock Performance - AMD's stock outperformed Nvidia's for the first time since 2019, with AMD shares rising by 77% compared to Nvidia's 39% increase last year [1][2] - Over the past five years, Nvidia's stock has soared more than 1,300%, while AMD's stock has increased by only 160% [1] Group 2: Growth Prospects - AMD's growth prospects are viewed positively, with CEO Lisa Su projecting over 35% annual revenue growth in the next three to five years [2] - Major tech companies, including OpenAI and IBM, are utilizing AMD's chips, indicating strong demand and potential for future growth [2][4] Group 3: Financial Metrics - AMD's market capitalization is approximately $380 billion, significantly smaller than Nvidia's $4.5 trillion valuation [6] - AMD's forward price-to-earnings (P/E) ratio is 37, which is higher than Nvidia's forward P/E of 24, despite AMD's lower earnings [8][9] Group 4: Profitability Comparison - Nvidia generated nearly $100 billion in earnings over the past 12 months, while AMD's net income totaled $3.3 billion during the same period [9] - Nvidia's gross margin stands at 70.05%, compared to AMD's gross margin of 44.33%, highlighting Nvidia's superior profitability [4][7] Group 5: Market Position and Future Outlook - Nvidia is recognized as the leader in AI chips and is expected to maintain this status as long as AI spending remains strong [12] - There is a belief that AMD could outperform Nvidia in the near term as it scales up its AI chip business, attracting growth investors [13]