AMD Stock Is Crushing Nvidia's in 2026. Will That Continue?

If you asked me which stock would have a better 2026, Nvidia (NASDAQ: NVDA) or Advanced Micro Devices (NASDAQ: AMD), I would have said Nvidia without hesitation. If the only thing you had to look at were business results, you'd likely come to the same conclusion as my projection.

However, the market is in love with AMD's stock, and it has trounced Nvidia's year-to-date performance. Since the start of 2026, AMD's stock has risen a jaw-dropping 144%. Nvidia has barely done anything, rising about 4%. Clearly, the market prefers AMD to Nvidia stock.

But will that continue into the latter half of 2026? Let's take a look.

Image source: Getty Images.

AMD is putting up a fight in the AI computing arena

AMD and Nvidia are both deeply involved in the AI computing build-out. Nvidia is more exposed than AMD, but AMD still gets over half its revenue from data center-related products. From the start of the AI race, Nvidia's products were hands down better than AMD's. Additionally, Nvidia had its graphics processing unit (GPU) controlling software, CUDA, that was ages ahead of AMD's offering. This allowed Nvidia to capture a large market share, and it became the go-to computing unit for all AI workloads.

AMD has clawed itself back into the mix and launched several exciting products, like its Instinct MI350 series. This landed AMD several deals, including one with OpenAI. All of this added to the hype around AMD's stock indicating that it could become a legit competitor in the AI data center landscape.

This caused the stock to surge throughout 2026, as the prevailing sentiment is that AMD has caught up with Nvidia. The problem is that that's just not the case.

Nvidia is crushing AMD in nearly every financial metric

The "AMD is back" argument falls apart when you compare its results to Nvidia's. In the first quarter, AMD's data center division grew at a respectable 57% year-over-year pace and a 7% quarter-over-quarter pace. Nvidia nearly doubled those results, with data center revenue rising 92% year over year and 21% quarter over quarter. As for size, Nvidia is nearly 15 times larger, with its data center division generating $75.2 billion in Q1, and AMD's totaling $5.8 billion. In the company-wide view, Nvidia is still winning the race.

NVDA Net Income (TTM) data by YCharts.

So, how is Nvidia's stock underperforming AMD's so badly? In my view, the market has become irrational with AMD's stock. After its major run-up, AMD now trades for a shocking 71 times forward earnings. Nvidia trades at a far cheaper and more reasonable 21.6 times forward earnings. That means AMD's earnings must more than triple after 2026's growth is accounted for, just to trade at the same level that Nvidia does today.

That seems like an absurd mismatch of valuation and expectations, and with Nvidia not shrinking at all, it makes AMD seem like a worse stock pick for the future. I'm not betting against AMD stock in any way, as the market can remain irrational longer than I can stay solvent. Still, after looking at AMD and Nvidia, I have a hard time rationalizing investing in AMD versus Nvidia.

AMD appears to have already taken some of Nvidia's market share, according to the stock's sentiment (it really hasn't), while Nvidia appears to be losing every battle it's getting into (it's not). There is a huge mismatch in expectations, and I think investors would be smart to take advantage of it by selling AMD shares and instead investing that into Nvidia's stock, as it looks like a great value right now.

Just because Nvidia is the biggest company in the world, it doesn't mean it has reached a ceiling. It can go far higher, and if expectations come back to reality for other AI competitors, Nvidia's stock is primed to skyrocket.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.