AMD Joins $1 Trillion Market Cap Club
As of September 25, 2023, Advanced Micro Devices (NASDAQ: AMD) became the latest semiconductor company to achieve a $1 trillion market cap, following Nvidia, Broadcom, Taiwan Semiconductor, Samsung, and Micron. This marks a 195% stock rally for AMD in 2023, contrasting sharply with Nvidia’s 20% increase during the same period.
In Q2 2023, AMD reported revenue of $11.5 billion, reflecting a year-over-year growth of about 50%. However, Nvidia’s sales reached $96 billion, significantly outpacing AMD, with a data center revenue contribution of $89 billion and 117% year-over-year growth. AMD’s net income for the past 12 months was approximately $6.5 billion, compared to Nvidia’s $193 billion.
AMD’s current price-to-earnings (P/E) ratio stands at 162, indicating that its stock may be overvalued, while Nvidia trades at 28 times trailing earnings, suggesting room for growth as its data center sales continue to expand. Analysts caution that AMD must demonstrate its earnings can catch up with its inflated valuation to sustain this trajectory.
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