AMD Stock: Is It a Better Buy Than Nvidia in 2024?

While Nvidia has demonstrated impressive revenue growth over the past year, Advanced Micro Devices (AMD) is emerging as a compelling investment opportunity. Both companies are key players in the semiconductor industry, but recent performance and future prospects suggest AMD stock might be the better choice for some investors. As of March 20, 2024, AMD stock has surged 88% over the last year, outpacing Nvidia’s still-substantial 46% return. Following recent market fluctuations, both stocks are currently trading at more attractive valuations than earlier in the year, prompting the question: which semiconductor stock offers the greater potential?

Nvidia’s Dominance and Recent Performance

Nvidia (NASDAQ: NVDA) remains the leader in terms of sales growth. In the fourth quarter of its 2026 fiscal year (ended January 25, 2026), Nvidia reported $68.1 billion in revenue, a remarkable 70% year-over-year increase. This success is largely attributed to its dominance in the GPU market and the widespread adoption of its CUDA software ecosystem. Nvidia’s gross margins also stand at a healthy 75%, significantly higher than AMD’s 54%.

AMD’s Rising Star and Strategic Moves

Despite Nvidia’s strong performance, AMD (NASDAQ: AMD) is making significant strides. While Nvidia primarily focuses on GPUs, AMD is steadily increasing its market share in the CPU segment, reaching 29.2% as of Q4 2025. This growth is bolstered by strategic partnerships with industry leaders like OpenAI and Meta Platforms, announced within the last six months. Furthermore, AMD boasts a Price/Earnings to Growth (PEG) ratio under 0.5, even lower than Nvidia’s, indicating potential undervaluation. A PEG ratio below 1 is generally considered favourable.

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Investment Recommendation: A Balanced Approach

While Nvidia’s impressive revenue growth and GPU market share make it a strong contender, AMD’s rising CPU market share, strategic partnerships, and attractive valuation present a compelling case. If forced to choose, Nvidia remains a solid recommendation. However, a diversified approach – investing in both companies – allows investors to capitalize on the strengths of each.

Disclaimer: This is not financial advice. Always conduct thorough research and consult with a financial advisor before making investment decisions.

Source: The Motley Fool