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 99% YTD (crushing NVIDIA's 39%), the underdog is making moves. Both stocks have pulled back 15-20% from their October highs. Is this a buying opportunity, or a warning sign?

Let's break down exactly what our AI 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 ~$175 (-17%)
AMD: Down from $267.08 to ~$211 (-21%)

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 | ~$175 | ~$211 | | Market Cap | $4.3 trillion | $343 billion | | P/E Ratio (TTM) | 43x | 105x | | 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 | +39% | +99% | | AI Market Share | 80-90% | ~10% | | RSI (14-day) | ~33 (oversold) | ~39 (approaching oversold) |

Bottom line: NVIDIA is the dominant, more profitable business trading at a reasonable valuation. AMD is the high-growth challenger trading at a premium, 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 99% YTD (vs NVIDIA's 39%)
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 (TTM): 105x
Forward P/E: ~42x
Industry average P/E: 37x

The problem: You're paying 105x trailing earnings for a company with 54% gross margins (vs NVIDIA's 75%). AMD needs to execute flawlessly on AI chip ramp to justify this valuation.

Fair value analysis: Based on growth outlook and margins, a "fair" P/E for AMD would be around 64x. At 105x, the stock prices in significant optimism.

Part 3: Technical Analysis

NVIDIA Technical Setup

(Data as of December 15, 2025)

Current Price: ~$175
52-Week Range: $146 - $211.99
All-Time High: $211.99 (October 29, 2025)
Distance from ATH: -17%

Moving Averages:

50-day MA: $181.86 (price below = bearish short-term)
200-day MA: $185.72 (price below = bearish intermediate-term)

Key Indicators:

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

Support Levels:

$169 (52-week low area)
$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 in correction mode with RSI signaling oversold conditions. Historically, buying NVDA when RSI drops below 35 has been profitable. However, the stock needs to reclaim the 50-day MA (~$182) to confirm the correction is over.

AMD Technical Setup

Current Price: ~$211
52-Week Range: $76.48 - $267.08
All-Time High: $267.08 (October 29, 2025)
Distance from ATH: -21%

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 Our AI Says

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

StockGenie AI Analysis

StockGenie AI Analysis: NVDA vs AMD Generated: December 15, 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: 5/10 Below both major moving averages RSI at 33 (oversold—potential bounce) 17% below all-time high MACD negative but potentially bottoming

VERDICT: BUY ON WEAKNESS NVIDIA offers the best risk-adjusted opportunity in AI chips. ENTRY: $165-175 (current levels attractive) STOP LOSS: Below $155 (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 Premium valuation (105x P/E) is concern Lower margins than NVIDIA (54% vs 75%)

TECHNICAL SCORE: 4.5/10 Below both major moving averages RSI at 39 (not yet oversold) 21% 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 105x P/E, any execution stumble crushes the stock
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 (~$175)
Add remaining 50% if it drops to $160-165
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: $165-175 (current zone)
Target: $210-220 (return to prior highs)
Stop: $155 (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's 105x P/E carries too much execution risk
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 AI 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 StockGenie's AI creates all alerts for you.

The Bottom Line

If you can only buy one: NVIDIA wins at current prices. You get the dominant player (80-90% market share), best-in-class margins (75%), and a reasonable valuation (25x forward P/E) during a technical pullback. 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. But at 105x P/E, you're paying a premium for that optionality. Wait for a deeper pullback to $180-195 for 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

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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 15, 2025.