Nvidia outgrows AMD 117% to 107%, yet AMD costs 3x more

The comparison hinges on a scale paradox. Nvidia's data center division brought in $89 billion in its FY2027 second quarter, more than ten times AMD's $6.7 billion in Q2, and the law of large numbers would suggest the smaller company should grow faster. Instead, Nvidia posted 117% growth versus AMD's 107%. The divergence widens further when non-data-center segments are included: Nvidia's data center business accounts for the bulk of its $96.2 billion total revenue, while AMD's $11.5 billion quarter leans more heavily on slower-growing product lines, dragging its overall growth rate below Nvidia's. The author notes the two companies' financial calendars are about one month apart, so the comparison is imperfect but the best available. Given that growth gap, a premium valuation for Nvidia might seem logical, yet the market prices AMD at roughly three times Nvidia's forward earnings multiple. The author calls that gap a mistake and expects it to correct so the two trade at roughly similar valuations, though whether that happens through an AMD sell-off or an Nvidia rise is uncertain. The author's conclusion is that Nvidia will be the far better stock to own over the next few years, citing its broad exposure to the AI arms race.