AMD vs Nvidia: The Best Stock To Buy Isn’t Who You Think

Let me ask you a simple question. If you had to pick one stock right now, AMD or Nvidia, which one would you choose? Nvidia has given investors a 1546% return over the past 5 years. AMD has given investors 121% return in just the last 3 months. And today we are going headtohead. Which one gives you the better return if you bought it right now based on our assumptions for the future? All right, so let's break these two down side by side across three categories. First one, products and software. Second one, growth potential. Third one, AI market dominance. First off, with products, AMD's biggest advantage is simple. You get more for your money. Their chips deliver similar performance to Nvidia at a lower price. And AMD almost always offers more memory inside the chip at the exact same price point. That means more customers can afford their products and getting more for it. Nvidia does not compete on price. They compete on being the best and their numbers prove it. Now, when it comes to software, Nvidia built something called CUDA about 15 years ago. It is the software platform that every AI developer, every research lab, every major AI company uses to write code for their chips. And guys, the switching costs are insane. Switching away from it is not easy. Not necessarily the price, but the labor involved. So, we're going to come back to why this matters so much in a minute, but this is Nvidia's major advantage over AMD and over a lot of the rest of the AI chipm community. Now, AMD's platform is called RockMe. It's improving, but unlike CUDA, AMD's technology is open- source, meaning it works across a wider range of hardware and attracts a lot of developers who want flexibility. Next category, growth potential. This is where AMD makes its most compelling case. Nvidia's annual revenue is 216 billion. AMD's is 37 billion. For Nvidia to double, it needs to add $216 billion in new sales. For AMD to double, it needs to add 37 billion. Challengers with real products and real momentum can move faster than much bigger giants. AMD is also far more diversified. Data center GPUs, server, CPUs, gaming chips, and embedded processors. Nvidia is heavily concentrated in AI data center hardware. So if one of AMD's more diversified product lines starts to explode, they can really drive that revenue while Nvidia is not getting that. Third, AI market dominance. Nvidia controls 90% of the AI data center market. When the biggest AI companies in the world need chips to train their most powerful models, they are reaching for NVIDIA. AMD is winning real business in the inter in inference market when AI actually runs and does the work and that market is growing fast. But Nvidia is also expanding beyond chips into robotics and physical AI making them less of a chip company and more of a complete AI infrastructure company. So both companies have real strengths. So the bold case on AMD, it's very simple. We're in the early innings of the biggest technology buildout in human history. and AMD has positioned itself right in the middle of it with both CPUs and GPUs, two products that are both critical to AI infrastructure. Here is what's already happening. AMD's data center revenue grew 57% in just one quarter. Their free cash flow hit 8.57 billion on the trailing 12 months, more than triple what it was in 2024. And the bulls believe this is just the beginning. Goldman Sachs, Wed Bush, and Stifle have all raised their price targets on AMD. Some analysts are projecting AMD's total revenue could hit 155 billion by 2030. That is growth of 35% every single year just to get there. If Lisa Sue, the CEO, is right about where this market is heading, AMD could eventually be as large as Nvidia today. The other thing that bulls point to is AMD's unique position. Unlike most chip companies, AMD competes in both GPUs and CPUs. As a Gentic AI drives more demand for CPU processing alongside GPU power, AMD benefits from both sides of that equation at the same time. That is a position that almost no other company in the world is in. That's like making the car engine and the car computer. Both things necessary a car, but being able to build both of them. So, as each one gets better and better, you're getting more and more orders from each one. Now, the bullcase in Nvidia. If AMD's bullcase is about catching up, Nvidia's bullcase is about pulling further ahead. Their new Blackwell chip platform alone is expected to generate roughly half a trillion dollars in revenue between 2025 and 2026. Half a trillion from one product cycle. And right behind Blackwell is a platform called Reuben. Nvidia is not standing still. They are absolutely running. And Jensen Huang, Nvidia CEO, is describing the current demand environment as astronomical. He is biased. But the biggest AI companies in the world are not just buying chips. They're planning deployments measured in gigawatts of power. That's an almost incomprehensible scale of commitment to Nvidia's hardware. But here's what makes the Nvidia bullcase truly unique. They're not just a chip company anymore. They are moving into robotics, a market that's growing at 72% per year and could exceed 30 billion by 2030. They're selling to governments building national AI infrastructure. And they're building out a software and services business that could eventually generate very high margin recurring revenue on top of everything else they do. Some analysts argue that despite its enormous stock price, Nvidia is actually undervalued relative to its growth when you look at the right metrics. The consensus price target from analysts right now it sees exceeds 250 bucks with some projecting it could reach 300 by 2027. These are two companies. These are two very different bull cases. AMD is the high growth challenger with room to run. Nvidia is the dominant leader still accelerating. So let's talk about what could go wrong for each. So the bare case on Nvidia. Here's the thing about Nvidia that keeps bears up at night. The concentration of a handful of massive customers. Microsoft, Meta, Amazon, Google. That is an extraordinary amount of dependence on very small number of relationships. If any of those companies slow down their AI spending, even temporarily, Nvidia feels it immediately and everywhere. And here is the uncomfortable question the Bears are asking. Has AI actually generated enough real revenue yet to justify the hundreds of billions being spent on chips? Because right now the spending is happening at a pace that assumes AI will be one of the most profitable technologies in human history. If that timeline takes longer than expected, if companies decide to pause and digest what they've already bought, demand for Nvidia chips could slow sharply and a stock price perfection does not handle slowdowns very well. And guys, I want to remind you that it recently came out that 50% of the data centers in the world have either been stopped or delayed. That is a lot. So on top of that, Nvidia has already lost access to China due to US export restrictions. Jensen Huang himself estimated that's roughly a $50 billion market that they can no longer fully serve. And if restrictions tighten further, that number number gets far worse. Meanwhile, Google, Amazon, and others are quietly building their own custom chips to reduce their dependence on Nvidia. Their bare case is not that Nvidia fails. is that the growth slows just enough to make a very expensive stock look overpriced. Look at Adobe. Adobe has not contracted. Its growth has just slowed and everybody has freaked out about it and said that the company is failing and the stock is down from an all-time high of $700 just a few years ago down to 250. Now, the bare case in AMD, in some ways, it's very simple. This stock is trading at 150 times earnings. That means everything has to go right. Not mostly right. It has to go 100% correct, if not better. And history tells us that AMD is one of the most volatile stocks in the market. During downturns, it has historically dropped an average of 32% during market shocks, sometimes over 30% in less than 2 months. And here's what makes AMD's position even more precarious than people realize. AMD needs everything to go right at the same time. The MI450 has to ship on time. The big customer deployments with Meta and OpenAI have to perform and the overall AI spending environment has to stay strong. That's a lot of things that all have to line up perfectly for a stock trading at 150 times earnings. Two great companies, two very real downside scenarios. Now, let's answer the most important question. Which one is the better value right now? So, guys, before we get into that, I want to remind you, do not take our titles literally. The title's probably changed a billion times since you saw the thing and since we posted it. We're here to teach a process and a lesson that is deeper in the video than just the title that's used to get you in. So, let's go here and let's start comparing the two companies. So, guys, the first is AMD. $743 billion market cap, $745 billion enterprise value. That means only $3 billion in essentially net debt. And they generated $8.5 billion last year in free cash flow. So the debt is like negligible. It's nothing. Things I like, look at the profit margin. It's up a lot. It was very consistent for the last 5 and 10 years, but last year jumped to 13.37%. Is this a permanent plateau, or is it because the demand was so high and so hot, they were able to charge a lot more money. Now, the return on invested capital here sucks. The 5-year return is 12%, the one-year return is 3%. The 5year is great. The one-year sucks. And like we said before, 148 times earnings, but only 87 times free cash flow because the free cash flow is much greater than the earnings. So it's a screaming deal at 87 times free cash flow. That was sarcasm. Let's pull up Nvidia now. Nvidia $5.76 trillion market cap essentially. Actually, not essentially, no debt, basically $5.74 trillion enterprise value. They generated a hundred billion in free cash flow. So, what does this mean? AMD has 8.5 billion in free cash flow. Nvidia has 100 billion, 97 billion. To a lame ass person who thinks they're investor, they're going to say, well, obviously Nvidia is better because they make more money. To which I would say, okay, if you could pay $und00 billion for AMD or $10 billion for Nvidia, which one's better? Obviously, Nvidia. Flip it around. Now, if you could pay $10 billion for AMD and call it five $10 trillion for Nvidia, which one's the better investment? Obviously, AMD. That's the difference. The good investment isn't determined by the total number of free cash flow and earnings. It's about what you're paying for that. That's very, very key that everybody gets wrong. And this is exactly why I teach on YouTube because I was so sick of hearing people talk about, well, this number is better than that number, so it must mean this is a better deal. No, it's what are you paying for that? A Ferrari is a phenomenal car. If you have to pay hundred billion dollars for a Ferrari, that's not a phenomenal car. If you pay a dollar for it, it's awesome. Same car, different price. That's what's really important. Okay. High returns on capital. These are way higher than AMD's. Much better quality business. Growing their profit margin in the last 10 years is still 49%. Last year, 55%. Gross margin is 71%. I mean guys, this company's crazy. It's actually selling for less price of free cash flow as well. So, isn't that interesting? AMD is at 86 times. Um, Nvidia is at 60 times. But we do think AMD has more growth potential. So, maybe that's why it's more expensive in that multiple because people are saying, well, it can grow faster, therefore it deserves a premium. The question is, is that still a reasonable price? If the premium, if Nvidia's price to free cash flow was 500, does that mean AMD should be 800? Not necessarily. It's all about understanding what you can get in the market and what you can get from other things. This is really important. Now, guys, I've thrown a lot of metrics at you. It can feel overwhelming and I get that. You're not alone. Everybody in the history of the world was intimidated and scared when they first heard the first thing they became experts in. We're here to guide you along the way. First step is all of these key metrics are available. absolutely for free in a PDF that we'll send you right now. Click the link in the description below or in the first pin comment and we'll send it to your email in a matter of minutes. That way you have it readily available so you can go over these metrics and we can be speaking the same language. And not only that, you'll probably sound a lot smarter to your friends so you'll be able to brag about how much smarter you are than them. Okay, let's start with Nvidia now on our eight pillars. So these are the eight pillars we see a lot. The X's are in the valuation metrics, the PE and the price of free cash flow. Everything else is a check. Now, remember their free cash flow and their profit is up a lot lately. These are the five-year numbers. So, these are a little exaggerated. And also remember that just because they're an X doesn't mean it's bad. If Nvidia is going to if I told you right now that Nvidia is going to grow its profit 100% a year for the next 10 years, this is all super cheap. The question is, what's the future look like? We don't know that. We have to make reasonable assumptions for the future. So, let's go look at AMD now and their eight pillars. Not as bad, not not as not terrible, but not as great. Dilution, they've increased their shares outstanding by 17%. To be honest with you guys, I don't blame them. Their stock is selling at nosebleleed levels. I'd be selling as many shares as I could and get the cash in my pocket. Just keep selling the shares to the crackheads. They'll take it. And their 5year PE and fiveyear price to free cash flow is way higher and their returns on capital aren't as great. So, those are the eight pillars there. Now, let's go to the analyst estimates. Analysts expect AMD's profit to grow 66, 56, 36, 22 1/2, and 37%. Basically 3 and a half times more free cash flow. Sorry, earnings in the next four years. Let's go to Nvidia's analyst estimates. Also, basically three times, very similar, but it's over five years, not four years. So, AMD is considered a faster growing earnings per share. Nvidia's revenue expected to grow from 217 billion to 5 684 in the next 5 years. That's 3x a little over 3x while AMD is expected to grow 46 to 134 which is a little under three times revenue growth but in four years versus 5 years. So AMD and Nvidia are AMD seems to be winning on both revenue growth potential as well as earnings per share potential. So now what do we do? We have a little bit of a story. We have a little bit of numbers. We put it into our stock analyzer tool. So guys, this is Nvidia. This is AMD. I did 10, 15, and 25% revenue growth for Nvidia. 8, 16, and 24 for AMD. Profit margin for Nvidia. I went really low, guys. 30, 37, and 45. Even though they did better than that, I just worry about more competition. AMD doing well. In Intel is doing better. Are they going to compete with them and drive down margins? AMD very low margins here. I did 8,1 15 and 22 guys. What's the PE and price of free cash flow 10 years from now? For Nvidia, I did 2024 and 28. For AMD, I did 18 21 and 24. Now, maybe I'm being biased here. I don't know. Maybe I should put this higher. Maybe this should be Let's actually make this 20, 24, and 28. Let's say AMD crushes it and they do the exact same thing that Nvidia does. And of course guys, I always do my 9% no margin of safety intrinsic value return. Remember, if you're going to buy an individual company, you can't be satisfied with 9 or 10%. You're taking a lot more risk. You need a lot more margin of safety in there. So, a higher desire return. Now, guys, the way I'm analyzing these two stocks is the exact same way I analyze every stock I would personally want to buy. I listen to the story and I combine it with the numbers and then finding the actual value with stock analyzer based on my own personal assumptions. Now, it used to be that only Wall Street and the big firms had the tools and the advantage. In fact, the average investor was out struggling by reading the headlines and hoping for the best. Everything at money exists to completely change that. You now have the advantage. inside our community, you get the same data and tools that I use, the same stock analyzer tool, and thousands of people running the same process right alongside you. So instead of guessing whether AMD or Nvidia is worth buying right now, you get to know based on your assumptions, based on your numbers, on your conviction, not somebody else's, you do want other input, there are thousands of other people in the community to sit there and have conversations about every company with it. So, my question to you is, what is that peace of mind worth to you? I don't care how big or small your portfolio is. How much is that worth to you? Well, guys, there's a 7-day trial for just $7. A dollar per day. Run whatever stock you've been sitting on. See what the numbers actually tell you before you spend a single dollar or a single minute on it. Once you try it, you will know this is if this is for you or not. And guys, there's a reason why over 70% of the people who sign up for our trial end up becoming yearly customers. It's because it changed the way in which they thought. So I hit the analyze button for both and here are the estimated returns. Well guys, they're both We have negative3% returns for Nvidia on the low side, high side 18.6, the middle is 5.5. For AMD, we have negative 15% returns, positive 12.35% returns, and a negative return for the middle one. Nvidia wins all the way around. So, even though AMD has a bigger growth potential based on my assumptions, Nvidia is the better buy. But I'm not buying this. There's no gun to my head saying you have to pick one of these. And here are the prices that make sense for both of them. Guys, this is a great lesson in realizing that people will overpay for growth. AMD is now the big growth story, not Nvidia. But look at the price. Look at the returns based on those assumptions. It's very difficult in my opinion. Now, I want to show you something that I think you're really going to want to see. We have a video that we titled I call the Intel turnaround. I want to make note I never called the Intel turnaround. It's still turning itself around. But right now there is a stock that looks like it could easily triple from here that is not called Intel. I broke it all down the numbers, the business, the the story, both the bull cases and bare cases, everything. And if you're the kind of person who just watched this entire video, that one is going to be very exciting for you. So click the video on your screen right now. I will see you over there.