NVIDIA Corporation (NVDA)vs Advanced Micro Devices, Inc. (AMD)

Quick verdict

These are not two versions of the same business. In the twelve months to July 2026 NVIDIA turned over $303.0bn and earned $192.9bn of net income; AMD, in the twelve months to June 2026, turned over $41.3bn and earned $6.4bn. NVIDIA's market capitalisation of $5,551.7bn at the 4 September 2026 close is roughly seven times AMD's $779.6bn, and the revenue gap is of a similar order. The unusual part is that the larger company is also the cheaper one on earnings: 29.1 times trailing earnings against 122.5 times, and 27.6 times EV/EBITDA against 111.0 times. Our factor scores hand NVIDIA valuation, growth, quality, balance sheet and income, for an overall 5.5 against 0.5; momentum is scored a tie. On these figures the comparison is lopsided rather than finely balanced.

At-a-glance comparison

Business model and revenue mix

Both companies are US-listed semiconductor designers on Nasdaq that outsource manufacturing, but their revenue mixes differ in weight. NVIDIA designs GPUs and accelerated-computing platforms aimed at data-centre AI, gaming, professional visualisation and automotive, and carried $303.0bn of trailing revenue to July 2026 across that base. AMD designs CPUs, GPUs and adaptive chips for PCs, servers, games consoles and data-centre AI, with $41.3bn of trailing revenue to June 2026 — a broader spread of end markets, including consumer PC and console silicon, but far less volume in absolute terms. Fiscal calendars also differ: NVIDIA's year ends in January, with fiscal 2026 the latest complete year, while AMD's ends in December, with 2025 the latest. Both sets of figures are TTM, combining the latest fiscal year with year-to-date reporting from SEC filings.

Valuation

Unusually for a pair this far apart in size, the multiples favour the giant. NVIDIA trades at 29.1 times trailing earnings and 27.6 times EV/EBITDA at the 4 September 2026 close; AMD at 122.5 times and 111.0 times respectively. On sales the two are close — 18.3 times for NVIDIA against 18.9 times for AMD — which tells you the gap is driven by what each converts into profit rather than by how the market prices the top line. Free cash flow yield reads 2.29% for NVIDIA against 1.08% for AMD. Price-to-book runs the other way, 24.2 times versus 11.6 times, reflecting NVIDIA's small equity base relative to earnings. PEG stands at 0.14 for NVIDIA and 2.62 for AMD, though both rest on growth rates that will not repeat indefinitely. Valuation is scored to NVIDIA.

Growth profile

Compounding is where the distance opens widest. NVIDIA grew revenue at a 100.1% annual rate from fiscal 2023 to fiscal 2026, and 66.9% annually from fiscal 2021, with earnings per share compounding 206.6% over the three-year span. AMD's revenue grew 13.6% a year from 2022 to 2025 and 28.8% a year from 2020 — the longer measure being the stronger one, which implies the recent pace has cooled rather than accelerated. AMD's three-year EPS CAGR of 46.7% looks striking beside its five-year figure of 5.2%, and the contrast is the tell: the 2022 starting point was a weak earnings year, so the shorter measure flatters. NVIDIA's growth is also measured from a much smaller base than today's revenue, but it has been sustained across both windows. Growth is scored to NVIDIA.

Profitability and quality

Margins explain most of the valuation spread. NVIDIA reported a 74.7% gross margin, a 65.2% operating margin and a 63.7% net margin on trailing revenue to July 2026 — operating profit of $197.6bn on $303.0bn of sales, with net income of $192.9bn close behind. AMD's gross margin of 53.2% is respectable for the industry, but operating margin falls to 15.7% and net margin to 15.6%, giving $6.5bn of operating profit on $41.3bn of sales. Both companies report a genuine operating-income line, so these are like-for-like. Free cash flow follows: $127.0bn at NVIDIA against $8.4bn at AMD, though AMD's cash flow exceeds its net income, which NVIDIA's does not. The quality factor is scored to NVIDIA, and the margin ladder is the reason rather than scale alone.

Balance-sheet risk

Neither balance sheet looks stretched. AMD held $5.1bn of cash against $3.2bn of total debt at 27 June 2026, putting it in a net cash position with net debt to EBITDA of -0.27 times, a current ratio of 2.61 and interest cover of 44 times. NVIDIA held $22.4bn of cash against $33.4bn of debt at 26 July 2026 — nominally net debt, but at just 0.05 times EBITDA it is immaterial against earnings of that size, and interest cover of 425.8 times confirms it. NVIDIA's current ratio of 4.59 is the stronger of the two. So AMD wins on the direction of net cash while NVIDIA wins on every coverage and liquidity ratio; the factor is scored to NVIDIA, though neither company faces a meaningful solvency question here.

Price performance and shareholder returns

On capital returned to shareholders, only one of these pays anything. NVIDIA distributed $0.28 per share over the trailing period, a 0.12% yield on the 4 September 2026 price, absorbing just 3.5% of earnings — a token dividend by yield, but one with enormous headroom. Buyback yield adds 1.0%. AMD pays no dividend and its buyback yield is 0.04%, effectively nil. On returns generated rather than distributed, NVIDIA posted a 117.2% return on equity and 69.1% return on invested capital; the ROIC figure is the more informative of the pair, since the equity base is small relative to profits. AMD returned 10.1% on equity and 8.5% on invested capital. The income factor is scored to NVIDIA, though income seekers would find little to work with in either name.

Which stock fits which investor

NVIDIA carries the style tag high-growth, high-quality, and it takes the value, growth, income and quality screens outright — a rare sweep that reflects how far 65.2% operating margins and a 29.1 times earnings multiple travel together. AMD is tagged a blend: a net cash balance sheet, a 53.2% gross margin and 28.8% five-year revenue growth, but priced at 122.5 times trailing earnings, which leaves little room for disappointment. An investor focused on realised profitability and cash conversion will find NVIDIA's $127.0bn of free cash flow difficult to look past. Someone weighing AMD is implicitly betting on margin expansion from 15.7% operating, since the current multiple is not supported by trailing earnings. Momentum is scored a tie — neither name separates on that measure in this dataset.

• Value: NVDA
• Growth: NVDA
• Income: NVDA
• Quality: NVDA

Frequently asked questions

Why does the much larger company trade on the lower earnings multiple?

Because profitability differs sharply. NVIDIA converted $303.0bn of trailing revenue to July 2026 into $192.9bn of net income, a 63.7% net margin, while AMD converted $41.3bn into $6.4bn, a 15.6% margin. The two trade at similar price-to-sales ratios — 18.3 versus 18.9 times — but NVIDIA's earnings multiple is 29.1 times against AMD's 122.5 times.

How big is the size gap between NVIDIA and AMD?

Substantial. NVIDIA's market capitalisation was $5,551.7bn at the 4 September 2026 close against AMD's $779.6bn, roughly seven times larger, and trailing revenue of $303.0bn against $41.3bn shows a similar ratio.

Is AMD's 46.7% three-year EPS growth rate reliable?

Treat it with care. It runs from fiscal 2022 to fiscal 2025, and the five-year figure from 2020 is only 5.2% — the wide gap indicates the 2022 starting point was a weak earnings year, so the three-year rate is flattered by its base.

Which company has the stronger balance sheet?

NVIDIA on the ratios, AMD on net position. AMD held $5.1bn cash against $3.2bn debt at 27 June 2026, net cash at -0.27 times EBITDA. NVIDIA's $33.4bn of debt against $22.4bn of cash equates to just 0.05 times EBITDA, with interest cover of 425.8 times and a current ratio of 4.59.

Do either of these pay a dividend?

NVIDIA paid $0.28 per share over the trailing period, a 0.12% yield with a 3.5% payout ratio, plus a 1.0% buyback yield. AMD pays no dividend and its buyback yield is 0.04%.

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