AMD Stock Has Doubled This Year. Is It Still a Buy?

Advancved Micro Devices (NASDAQ: AMD) has been one of the best-performing artificial intelligence (AI) stocks in 2026 so far. It has basically doubled in 2026, but nearly all of that run started in April. The question is whether AMD can continue this run throughout 2026 or whether there are better options available.

AMD just reported a blowout quarter, which helped boost the stock, but is it fully valued? Let's take a look.

AMD's business isn't just AI-focused

Unlike its peer Nvidia (NASDAQ: NVDA), AMD doesn't get all of its revenue from AI-related products. It has a much more balanced business, but if growth rates continue trending in the direction they are, AMD could become a lot more AI-focused than it is now.

In Q1, its data center division saw 57% revenue growth to $5.78 billion. Its other non-AI divisions also did quite well, with Client & Gaming rising 23% year over year to $3.6 billion and Embedded increasing 6% to $873 million.

If AMD's data center division continues rising quickly, that will transform AMD into a more Nvidia-like company, eliminating the balance that some investors prefer with AMD. AMD's long-term projections indicated a compounded annual growth rate (CAGR) of 60% for its data center division.

In comparison, its other two divisions will experience a 10% CAGR over the next five years. This will leverage AMD heavily toward AI, completing the transformation into an AI-focused business. That could be a good or bad thing, depending on where you think AI demand will go.

The market clearly loves the direction in which AMD's business is headed, which is why it has done so well over the past few months. However, that run-up comes at a price. AMD's stock is no longer cheap by any measure. It trades for 139 times earnings and 58 times forward earnings.

AMD PE Ratio data by YCharts

This indicates that AMD's earnings will skyrocket this year, but even after a strong year, the stock will still be very expensive. Investors need to ask themselves if this is a price worth paying, especially when Nvidia is growing at a much faster rate and trades for 27 times forward earnings.

To me, Nvidia is the far better investment, and AMD is only an alternative that some like to champion. However, AMD has been the better stock to own as of late, so the Nvidia superiority assessment hasn't panned out.

Time will tell which of these two is a better long-term investment, but I'm still taking Nvidia over AMD right now.

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.