AMD beats Nvidia in 1-month gains fueled by strong Q1 earnings and data center demand

Artificial intelligence (AI) stocks like AMD and Nvidia are surging due to easing recession fears and reduced U.S.-China trade tensions. AMD’s recent 21.5% gain is attributed to strong Q1 earnings, with a 36% revenue increase year-over-year. AMD’s data center business and AI-driven Instinct accelerators are key growth drivers.

AMD’s data center business saw a 57% revenue increase to $3.7 billion, driven by server CPU demand. The company is also expanding in the AI space, with double-digit growth in data center AI business and new chip developments like the MI350 and MI400 series.

Nvidia remains a dominant player in AI, generating $115.2 billion in fiscal 2025 revenue. Its Q1 fiscal 2026 revenue reached $44.1 billion, up 69% year-over-year. The Blackwell GPU architecture is a major growth driver, with upcoming GB300 chips expected to maintain momentum.

AMD and Nvidia are seeing increased buying activity, driving up valuations. AMD’s forward P/E ratio is 44.8x, justified by strong earnings growth forecasts. Nvidia’s lower ratio of 39.5x, coupled with significant earnings growth projections, makes it more appealing. Wall Street sentiment favors Nvidia, with a “Strong Buy” consensus rating.

Nvidia stock offers a better balance of valuation and earnings momentum compared to AMD. Analysts prefer Nvidia, with an average price target suggesting 15% upside potential from current levels. Despite AMD’s recent gains, its stock price has already surpassed the average analyst target, indicating limited near-term upside.

Read more at Yahoo Finance: AMD Beats Nvidia in 1-Month Gains, But Which AI Stock Do Analysts Like Best?