<div id="readability-page-1"><div><div><p>At first glance, <strong>Advanced Micro Devices Inc.</strong> (NASDAQ:<span> AMD) and <strong>Nvidia Corp.</strong> <span>NVDA</span> appear to belong in the same valuation range</span>. Both trade in the 40x forward earnings range. But that's where the similarities end – and where the pricing disconnect begins.</p><h2>Margins Matter — And Nvidia's Are Untouchable</h2><p>Nvidia isn't just growing – it's a profit machine. With 58% operating margins, 86% TTM revenue growth, and a balance sheet that boasts $43 billion in net cash, Nvidia runs like <strong>Apple Inc.</strong> <span>AAPL</span> but grows like a startup with over 30% in operating margins and loads of cash on its balance sheet. Investors paying 40x forward earnings know exactly what they're getting: a dominant player in AI with unmatched pricing power, scale, and ecosystem control.</p><p><strong>Read Also: Dan Ives Picks 5 Stocks For 2nd Half Of 2025: Nvidia, Palantir, Microsoft And More: ‘Golden Age Of Tech Is Here With AI Revolution’</strong></p><p>AMD, on the other hand, is still trying to prove it belongs in the same league. Yes, revenue is rebounding (+21.7% TTM), and yes, the MI300 chips offer a credible entry into the AI accelerator market. But AMD's 10% operating margin paints a different picture. This company is still weighed down by legacy businesses — PCs, gaming, and embedded — none of which are set to benefit meaningfully from the AI boom just yet.</p><h2>AMD's Valuation Assumes It's Already Won — Has It?</h2><p>So why is AMD trading at a forward P/E of 42.9x, nearly identical to Nvidia's 39.5x?</p><p>The answer might be misplaced optimism. Investors are pricing in a full-fledged AI breakout, without waiting for confirmation. AMD's valuation suggests it’s already playing at Nvidia's level, but the fundamentals don't support that story. Not yet.</p><p>This doesn't mean AMD isn't a good investment. It just means it's priced for a victory it hasn't achieved. Until AMD demonstrates that its AI revenue can scale — and its margins can follow — the current valuation may prove to be more hope than substance.</p><p>In a market obsessed with AI dominance, Nvidia's multiple is earned. AMD's looks borrowed — and the bill could come due if results don't back up the hype.</p><ul> <li><strong>Nvidia’s H20 China Play: Cramer’s ‘HUGE’ Call Ignites A $15 Billion AI Bonanza</strong></li> </ul><p><em>Photo: sdx15 / Shutterstock.com</em></p></div></div></div>

<p>Nvidia and AMD are both trading in the 40x forward earnings range, but their financials tell a different story. Nvidia boasts 58% operating margins and $43 billion in net cash, positioning it as a dominant player in AI. In contrast, AMD's 10% operating margin and reliance on legacy businesses raise concerns about its valuation, which is nearly identical to Nvidia's despite lacking the same fundamentals. Investors may be overly optimistic about AMD's potential in AI, leading to a valuation that may not be justified without proven results.</p>

- Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA) have similar forward earnings valuations, but their financial performances diverge significantly.  
- Nvidia boasts 58% operating margins and strong revenue growth, while AMD struggles with a 10% operating margin and relies on legacy businesses.  
- AMD's current valuation reflects an optimistic outlook on AI, but without proven revenue growth and improved margins, it may not justify its price compared to Nvidia's established dominance.

Nvidia's A Startup With Apple's Margins - AMD's Just Priced Like One