AMD Stock Has Outrun Nvidia 5X Since 2024. But There’s a Valuation Catch
Advanced Micro Devices, Inc.‘s (NASDAQ:AMD) remarkable stock-market run has given investors a reason to revisit a once-contrarian bet against Nvidia Corp (NASDAQ:NVDA). But the rally has also created an unusual valuation gap: AMD has delivered roughly five times Nvidia’s stock returns since July 2024, yet investors now pay considerably more for its earnings and revenue.
Beth Kindig, CEO and lead tech analyst at I/O Fund, is doubling down on her July 2024 prediction that AMD would outperform Nvidia, arguing that the gap could widen further. The company’s latest growth outlook gives her thesis another dimension.
AMD Now Has Two Engines Driving Its Growth
AMD’s challenge to Nvidia is no longer just about winning a bigger share of the AI accelerator market. Its CPU business is emerging as another significant growth driver.
Kindig said AMD’s Venice CPU revenue is now expected to more than double in 2027, accelerating from the previous outlook for growth of more than 70%. Meanwhile, GPU revenue is expected to grow significantly more than 100% over the same period.
Together, the two opportunities underpin AMD’s forecast for companywide revenue growth of more than 80% next year — more than twice the company’s long-term growth rate outlined at its November 2025 Analyst Day.
That combination matters because AMD does not have to displace Nvidia across the GPU market to benefit from rising AI infrastructure spending.
Stronger CPU demand alongside accelerating GPU sales could give the company multiple ways to capture that spending.
Nvidia Is Still Much Cheaper Than AMD
The market has rewarded AMD’s growth prospects, but investors are paying a substantial premium for them.
AMD’s market capitalization stood at approximately $954 billion, compared with Nvidia’s $4.01 trillion, based on the latest Benzinga Pro valuation data. Yet AMD trades at 34.8 times forward earnings, more than three times Nvidia’s 10.5 multiple.
The gap extends beyond earnings. AMD’s price-to-sales ratio of 21.3 compares with Nvidia’s 13.4, while its enterprise-value-to-EBITDA multiple of 84.2 is nearly five times Nvidia’s 17.1.
Even AMD’s PEG ratio, which adjusts valuation for expected earnings growth, is higher at 0.53 versus Nvidia’s 0.20.
These figures suggest investors are already assigning AMD a substantial growth premium. Its 2027 outlook will need to translate into sustained earnings growth to support that valuation.
Can AMD Extend Its Lead?
Kindig said AMD has gained more than 250% since her July 2024 prediction, compared with Nvidia’s 51%, and believes the performance gap could widen.
But past outperformance does not automatically make AMD the better investment from here. Nvidia’s considerably lower valuation gives investors a competing argument, particularly if its earnings growth remains strong.
The next test is whether AMD can deliver on its accelerated CPU and GPU expectations in 2027. For investors, the question is no longer simply whether AMD can challenge Nvidia.
It is whether the company’s expanding growth opportunity can justify paying more than three times Nvidia’s forward earnings multiple.
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