Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD), leading producers of discrete GPUs, are both capitalizing on the rapidly growing AI market. As of the latest analysis, Nvidia commands over 90% of the discrete GPU market and has a market cap of $4.71 trillion, while AMD holds a single-digit share and is valued at $854 billion. Nvidia reported a significant revenue surge of 85% year over year, reaching $81.6 billion in Q1 of fiscal 2027, surpassing Wall Street estimates by $2.5 billion.
Despite Nvidia’s impressive growth, trading at 21 times its projected earnings for fiscal 2027, it appears undervalued compared to AMD, which trades at 97 times its projected earnings for fiscal 2026. Over the fiscal years 2021 to 2026, Nvidia’s revenues and net income grew at CAGRs of 69% and 94%, respectively, while AMD’s growth was notably slower. Analysts project revenue growth for Nvidia at an additional CAGR of 46% from 2026 to 2029, driven by the Vera Rubin platform and expansions in AI applications.
In contrast, AMD’s anticipated growth is estimated at a CAGR of 44% for revenue and 82% for EPS from 2025 to 2028, fueled by its new AI chips and server technology. However, AMD’s significant valuation suggests that much of this potential growth is already priced in, leading to questions about analysts’ optimism regarding its competitive position against Nvidia and Intel.
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