NVDA vs AMD: Which AI Chip Stock Should You Buy? (December 2025)

The AI chip war has a clear leader—NVIDIA commands 80-90% of the data center GPU market. But AMD isn't backing down. With a massive OpenAI partnership announced in October and stock gains of 83% YTD (crushing NVIDIA's 30%), the underdog is making moves. Both stocks have pulled back 10-20% from their October highs. Is this a buying opportunity, or a warning sign?

Let's break down exactly what StockGenie's analysis reveals about these two semiconductor giants.

Why This Comparison Matters Now

The timing is critical. Both NVDA and AMD hit all-time highs on October 29, 2025, and have since corrected:

NVDA: Down from $211.99 to ~$184 (-13%)
AMD: Down from $267.08 to ~$215 (-20%)

Both stocks show "Sell" signals on technical indicators. But pullbacks in strong uptrends often create the best entry points. The question is: which chip stock offers better risk/reward right now?

The Quick Comparison

Metric	NVIDIA (NVDA)	AMD
Current Price	~$184	~$215
Market Cap	$4.3 trillion	$343 billion
P/E Ratio (Adjusted)	43x	~40x*
Forward P/E	25x	~42x
Q3 2025 Revenue	$57.0B	$9.2B
Data Center Revenue	$51.2B (+66% YoY)	$4.34B (+22% YoY)
Gross Margin	~75%	54%
YTD Stock Return	+30%	+83%
AI Market Share	80-90%	~10%
RSI (14-day)	~33 (oversold)	~39 (approaching oversold)

*Note: AMD's GAAP P/E of ~105x is inflated by Xilinx acquisition amortization. Adjusted P/E of ~40x is more comparable.

Bottom line: NVIDIA is the dominant, more profitable business trading at a reasonable valuation. AMD is the high-growth challenger at a similar adjusted P/E, betting on future market share gains.

Part 1: NVIDIA Fundamental Analysis

The AI Computing Monopoly

NVIDIA isn't just winning the AI chip race—it's lapping the competition. With 80-90% market share in data center GPUs, NVIDIA has achieved something rare in tech: a near-monopoly in the most important computing segment of our era.

Q3 2025 Highlights:

Record revenue: $57.0 billion (up from $35B same quarter last year)
Data center revenue: $51.2 billion (+66% YoY)—this single segment is larger than most tech companies' entire business
EPS: $1.30 (beat estimates)
Net income: Projected to exceed the combined revenue of AMD and Intel this year

What makes NVIDIA special:

CUDA moat: Developers have built on NVIDIA's CUDA platform for 15+ years. Switching costs are enormous.
Full-stack advantage: Hardware + software + networking (Mellanox) + cloud partnerships
Blackwell momentum: Next-gen chips already seeing massive demand
Pricing power: Customers pay premium prices because alternatives can't match performance

Profitability: Best-in-Class

Gross Margin: ~75% (compare to AMD's 54%)
Operating Margin: ~60%
ROE (Return on Equity): 107.36%
ROIC (Return on Invested Capital): 66.87%

These numbers are extraordinary. NVIDIA makes more profit on each chip sale than most companies make in total margin.

Valuation: Surprisingly Reasonable

P/E Ratio (TTM): 43x
Forward P/E: 25x (based on projected earnings growth)
PEG Ratio: 0.67 (under 1.0 suggests undervalued relative to growth)

Context: At 43x trailing earnings, NVIDIA trades below its 10-year average P/E of 53x. The forward P/E of 25x, combined with 50%+ earnings growth, makes NVIDIA arguably the cheapest mega-cap AI stock on a growth-adjusted basis.

Part 2: AMD Fundamental Analysis

The Scrappy Challenger

AMD has transformed from "budget alternative" to legitimate AI contender. The company's Instinct MI300/MI350 series GPUs are winning enterprise deals that would have been unthinkable two years ago.

Q3 2025 Highlights:

Record revenue: $9.2 billion (+36% YoY)
Data center revenue: $4.34 billion (+22% YoY)
EPS: $1.20 adjusted (beat estimates of $1.16)
Gross margin: 54% (non-GAAP)
Operating margin: 24%

Recent wins that matter:

OpenAI partnership: AMD becomes "core preferred partner" to deploy 6 gigawatts of AMD GPUs—with the first 1GW deployment of MI450 chips starting H2 2026
Oracle deal: 50,000 MI450 AI chips for Oracle Cloud
Server CPU gains: On track for 40% revenue share in server CPUs by end of 2025

The Growth Story

AMD's appeal is the growth trajectory:

Data center revenue: $4.34B (still small vs NVIDIA's $51B, but growing fast)
Stock up 83% YTD (vs NVIDIA's 30%)
Q4 guidance: $9.6B revenue (+25% YoY), above analyst expectations

The bull case: If AMD captures even 20% of the AI accelerator market (from ~10% today), the stock could double again.

Valuation: Premium Price for Premium Growth

P/E Ratio (Adjusted): ~40x (*GAAP P/E appears higher at ~105x due to Xilinx acquisition amortization costs)
Forward P/E: ~42x
Industry average P/E: 37x

Context: The headline GAAP P/E of 105x is misleading. When adjusted for Xilinx amortization, AMD trades at roughly 40x earnings—closer to NVIDIA's 43x. This makes the valuation comparison much tighter than it first appears.

The consideration: At ~40x adjusted P/E with 54% gross margins (vs NVIDIA's 75%), AMD needs to execute on AI chip growth to justify premium pricing. The growth trajectory supports it, but NVIDIA has more margin of safety.

Part 3: Technical Analysis

NVIDIA Technical Setup

(Data as of December 23, 2025)

Current Price: ~$184
52-Week Range: $146 - $211.99
All-Time High: $211.99 (October 29, 2025)
Distance from ATH: -13%

Moving Averages:

50-day MA: ~$182 (price at/near = neutral)
200-day MA: ~$186 (price slightly below = neutral to bearish)

Key Indicators:

RSI (14-day): 33 (oversold territory—below 30 is extreme)
MACD: -1.62 (bearish, but could be bottoming)

Support Levels:

$175 (recent pullback low)
$165 (psychological support)
$150 (major support if selling accelerates)

Resistance Levels:

$182 (50-day MA)
$186 (200-day MA)
$212 (all-time high)

Technical interpretation: NVIDIA is recovering from oversold conditions. RSI at 33 suggests the worst of the selling may be over. The stock is testing its 50-day MA (~$182)—a decisive break above would confirm the correction is ending.

AMD Technical Setup

Current Price: ~$215
52-Week Range: $76.48 - $267.08
All-Time High: $267.08 (October 29, 2025)
Distance from ATH: -20%

Moving Averages:

50-day MA: $218.13 (price below = bearish)
200-day MA: $228.08 (price below = bearish)

Key Indicators:

RSI (14-day): 39 (approaching oversold)
MACD: -1.72 (bearish)

Support Levels:

$209-215 (current consolidation zone)
$194 (key support—break here signals deeper correction)
$172 (major support)

Resistance Levels:

$218 (50-day MA)
$228 (200-day MA)
$234 (long-term MA)
$267 (all-time high)

Technical interpretation: AMD has further to fall before reaching oversold (RSI below 30). The 21% pullback is sharper than NVIDIA's, reflecting higher beta. Watch the $194 level—a break below could trigger a move to $172.

Part 4: What Genie Says

Here's what Genie delivers when you ask: "Should I buy NVDA or AMD?"

StockGenie AI Analysis

StockGenie Analysis: NVDA vs AMD Generated: December 23, 2025

NVIDIA (NVDA)

FUNDAMENTAL SCORE: 9/10 Dominant market position (80-90% share) Exceptional margins (75% gross, 60% operating) Reasonable valuation (forward P/E 25x) Best-in-class profitability (107% ROE) Strong product pipeline (Blackwell)

TECHNICAL SCORE: 5.5/10 Testing key moving averages RSI at 33 (oversold—potential bounce) 13% below all-time high MACD negative but potentially bottoming

VERDICT: BUY ON WEAKNESS NVIDIA offers the best risk-adjusted opportunity in AI chips. ENTRY: $175-185 (current levels attractive) STOP LOSS: Below $160 (invalidates thesis) TARGET: $210-230 (return to highs + momentum)

AMD

FUNDAMENTAL SCORE: 7/10 Strong growth trajectory (+36% revenue) Major partnership wins (OpenAI, Oracle) Improving market position Adjusted P/E ~40x (GAAP inflated by Xilinx amortization) Lower margins than NVIDIA (54% vs 75%)

TECHNICAL SCORE: 4.5/10 Below both major moving averages RSI at 39 (not yet oversold) 20% below all-time high More downside risk if $194 breaks

VERDICT: WAIT FOR BETTER ENTRY AMD is a great company at a rich price. ENTRY: $180-195 (wait for deeper pullback) STOP LOSS: Below $170 TARGET: $250-280 (requires market share gains)

HEAD-TO-HEAD WINNER: NVIDIA At current prices, NVIDIA offers better risk/reward. You get the dominant player at a reasonable valuation during a technical pullback. AMD requires more optimism baked into the price.

Part 5: Bull Case vs Bear Case

NVIDIA Bull Case

AI spending acceleration: Data center capex still growing 30%+ annually
Blackwell cycle: Next-gen chips launching in 2025-2026 with massive pre-orders
Enterprise adoption: Every major company needs AI compute—NVIDIA is the default choice
Valuation reset: Forward P/E of 25x is cheap for 50%+ earnings growth

NVIDIA Bear Case

Customer concentration: Top hyperscalers (Microsoft, Google, Amazon) represent huge portion of revenue
China restrictions: Export controls limit addressable market
Competition catching up: AMD, Intel, and custom chips (Google TPU, Amazon Trainium) gaining ground
Cyclicality: Semiconductor demand can turn quickly

AMD Bull Case

Market share gains: Even small gains in the massive AI market = huge revenue growth
OpenAI validation: Partnership signals AMD chips are enterprise-ready
Diversification: CPU + GPU + embedded = multiple growth drivers
Underdog momentum: Stock has outperformed NVDA 2.5x YTD

AMD Bear Case

Valuation risk: At ~40x adjusted P/E, there's less room for error than NVDA
Margin gap: 54% gross margin vs NVIDIA's 75% = less pricing power
CUDA lock-in: Most AI developers won't switch from NVIDIA's ecosystem
Scale disadvantage: NVIDIA's data center does more revenue in ONE QUARTER ($51B) than AMD's does in a year ($17B run rate)

Part 6: Entry Strategies by Investor Type

For Long-Term Investors (5+ year horizon)

NVIDIA Strategy: Start building position now, add on further weakness

Buy 50% position at current prices (~$184)
Add remaining 50% if it drops to $170-175
Hold through volatility—this is AI's essential infrastructure company

AMD Strategy: Wait for better entry

Set limit orders at $180-195
Only buy if you believe AMD can capture 20%+ AI market share
Smaller position size (higher risk/reward)

For Growth Traders (6-18 month swing trades)

NVIDIA Trade:

Entry: $175-185 (current zone)
Target: $210-220 (return to prior highs)
Stop: $160 (below recent support)
Risk/Reward: ~2:1

AMD Trade:

Entry: Wait for $190-200 OR confirmed breakout above $230
Target: $260-280
Stop: $175
Risk/Reward: Better to wait for cleaner setup

For Conservative Investors

Recommendation: NVIDIA only

AMD requires more execution to justify valuation
NVIDIA's 25x forward P/E with 80%+ market share is the safer bet
Consider starting with half position, adding on pullbacks

Part 7: Monitor These Stocks with StockGenie

Stop refreshing Yahoo Finance every hour. Let Genie watch for you:

NVIDIA Alert Examples:

"Alert me if NVDA drops below $165"
"Alert me when NVDA reclaims its 50-day moving average"
"Alert me if NVDA RSI drops below 30"

AMD Alert Examples:

"Alert me if AMD drops to $190"
"Alert me when AMD breaks above $230"
"Alert me if AMD closes below $194"

Or simply ask: "Watch NVDA and AMD for buying opportunities" and Genie creates all alerts for you.

The Bottom Line

If you can only buy one: NVIDIA wins at current prices (~$184). You get the dominant player (80-90% market share), best-in-class margins (75%), and a reasonable valuation (25x forward P/E) as it tests key moving averages. The RSI at 33 suggests oversold conditions—historically a good entry point.

If you want higher risk/higher reward: AMD offers more upside IF they execute on market share gains. At ~40x adjusted P/E (GAAP is inflated by Xilinx amortization), the valuation is more reasonable than it appears. Still, waiting for a pullback to $180-195 offers better risk/reward.

If you want both: Allocate 70% to NVIDIA, 30% to AMD. This captures the market leader while maintaining exposure to the challenger's upside.

Try It Yourself

This entire comparison took 60 seconds to generate using StockGenie.

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Disclaimer: This is not financial advice. This analysis represents StockGenie's AI-powered research capabilities applied to NVIDIA (NVDA) and AMD. Markets change rapidly—verify all data points yourself and consult a licensed financial advisor. Both stocks carry significant risk. Past performance does not guarantee future results.

Written by the StockGenie team. Updated: December 23, 2025.