Cathie Wood bought $63 million of Nvidia on Monday and sold $57 million of AMD the same day. The timing was not subtle. Nvidia had just unveiled RTX Spark, its first PC processor, at Computex. AMD was trading near all-time highs.
The trade tells you something the market has been slow to price: these two companies are not in the same league anymore.
The Financial Gap Is Staggering
Nvidia reported $81.6 billion in revenue last quarter with a net profit of $58.3 billion. AMD reported $10.3 billion in revenue with a net profit of $1.4 billion.
Nvidia's profit in a single quarter is more than five times AMD's entire revenue.
Nvidia's gross margin sits at 74%. AMD's is 50%. Nvidia converts about 71 cents of every revenue dollar into net income. AMD converts 13 cents. Both companies sell chips into the AI data center market. The economics are fundamentally different.
Nvidia's return on equity runs at 112%, a figure that would look like a typo in most industries. AMD's is 8%.
Where the AI Money Goes
The AI infrastructure cycle has been the biggest wealth-creation event in semiconductor history. But the money is not spreading evenly.
Nvidia's data center revenue hit $75.2 billion last quarter, up 92% year over year. That single segment generates more revenue than the entire annual output of most S&P 500 companies. Networking revenue alone reached $14.8 billion, nearly tripling from a year ago.
AMD's data center revenue hit a record $5.8 billion, up 57%. Strong growth by any normal standard. But Nvidia's data center business is 13 times larger. Broadcom generated $10.8 billion in AI semiconductor revenue last quarter and is still a distant second.
The reason is structural. Nvidia controls both the GPU hardware and the CUDA software ecosystem that developers have spent a decade building on. AMD offers competitive chips. But switching costs for enterprises already running Nvidia infrastructure are enormous.
AMD's Bull Case Still Has Legs
AMD is not standing still. Revenue grew 38% year over year, data center revenue climbed 57%, and management guided Q2 revenue to roughly $11.2 billion, implying 46% growth. Lisa Su raised the company's forecast for the server CPU market from 18% to 35% annual growth, projecting it will exceed $120 billion by 2030.
AMD's EPYC server processors continue to take share from Intel, which has struggled to compete on both performance and efficiency. A few years ago AMD held a fraction of the server CPU market. Its data center segment now generates $5.8 billion per quarter.
The Instinct MI300 and MI400 GPU accelerators give hyperscalers an alternative to Nvidia for certain AI training and inference workloads. Google, Microsoft, and Meta all deploy AMD silicon alongside Nvidia in their data centers. For buyers who want negotiating leverage against Nvidia, AMD remains the only credible option.
Nvidia Just Entered AMD's Living Room
The RTX Spark announcement at Computex changes the competitive map. Nvidia revealed a PC processor combining an ARM-based CPU with a Blackwell GPU, delivering one petaflop of AI performance in a system that fits on a desk. HP, Lenovo, Dell, and Asus plan to ship devices this fall.
This is not a GPU add-in card. It is a full system-on-chip that competes directly with AMD's Ryzen processors and Intel's Core lineup. Nvidia laid out a three-generation roadmap: Spark, then Vera Rubin, then Rosa Feynman.
AMD's client computing segment generated $2.9 billion last quarter. Nvidia has never competed for this revenue before. The entry may take years to gain meaningful share, but the signal is clear: Nvidia sees AMD's core PC business as territory worth taking.
Marvell has surged more than 30% since Jensen Huang called it "the next trillion-dollar company" at Computex. The AI semiconductor ecosystem keeps expanding. The orbit keeps centering on Nvidia.
Which Stock Is Actually Cheaper?
This is where the comparison gets counterintuitive. Nvidia trades at roughly 32 times trailing earnings. AMD trades at 164 times.
Nvidia carries an EV/EBITDA multiple of 27. AMD's is 102.
The company with the dominant market position, the higher margins, and the faster absolute revenue growth trades at one-fifth the earnings multiple of its competitor. Nvidia guided next quarter to $91 billion in revenue, which at current margins would produce around $56 billion in net income. AMD guided to $11.2 billion with margins that generate roughly $1.5 billion.
AMD's valuation assumes the company will close a gap that has only been widening. If AMD doubles earnings over the next two years, it would still trade at a premium to where Nvidia sits today.
The PEG ratio tells a similar story. Nvidia's sits at 0.3, meaning earnings growth far outpaces the price investors pay for it. AMD's PEG is 1.3.
What Separates Them Going Forward
The next test comes when AMD reports Q2 earnings. If data center revenue accelerates toward $7 billion and Instinct GPU adoption deepens, the valuation gap could begin to narrow.
If Nvidia keeps guiding quarterly revenue toward $100 billion with 60%-plus margins, the question changes. It is not whether NVDA is expensive. It is whether AMD is cheap enough to justify the risk of chasing a competitor that keeps pulling further ahead.
