Nvidia trades at 33 times its projected earnings for fiscal 2026 (which ends in January 2026), while AMD trades at 45 times its estimated earnings for 2025. Therefore, Nvidia's stock still looks cheaper than AMD's relative to its growth potential -- even though it has already outperformed AMD by a wide margin over the past five years.

Is Advanced Micro Devices, Inc. the next Nvidia or Intel? Explore AMD's Q4 results, AI market potential, and competition. Click for more on AMD, NVDA, and INTC.

Triple-digit gains from these AI stocks should be more than enough to outperform Nvidia (NASDAQ: NVDA ). NVDA stock has “only” delivered 7% in gains over the past six months, and it no longer has the potential to print generational wealth.

From this perspective, AMD's stock looks far more expensive than Nvidia's, which it is. However, both companies are undergoing strong growth, and AMD's profit picture is set to improve throughout 2025, so using a forward P/E ratio is also a good idea.