<p>The sell-off in semiconductor stocks has been brutal. An artificial intelligence (AI) chip forecast from <strong>Broadcom</strong> in early June that was lower than expected set off a rout that erased more than $1 trillion in chip-stock value in a single session, and the selling has flared up again since. Two of the biggest names caught in it are AI chip leader <strong>Nvidia</strong> <span class="ticker-mention inline-flex items-center font-bold">(NVDA <span class="ml-1 text-red-900">0.93%</span>)</span> and its closest challenger, <strong>Advanced Micro Devices</strong> <span class="ticker-mention inline-flex items-center font-bold">(AMD <span class="ml-1 text-red-900">0.02%</span>)</span>.</p>
<p>Both stocks have pulled back. As of this writing, Nvidia trades around $199, about 16% below its 52-week high. AMD, at about $520, has held up better and sits within roughly 8% of its own high.</p>
<p>For investors looking to buy the dip on chip stocks, this is a good place to look. But which is the better buy after the sell-off? It is tempting to assume AMD -- the smaller company that should, in theory, grow faster off a lower base. But the latest numbers tell a different story.</p>
<div><img alt="A line chart with two different lines on the chart." width="880" height="619" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NzYxMjUvbnZpZGlhLXZzLWFtZC5qcGcmdz0zODQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NzYxMjUvbnZpZGlhLXZzLWFtZC5qcGcmdz0zODQw"/>
<p>Image source: Getty Images.</p>
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<h2>Nvidia: bigger -- and still growing faster</h2>
<p>Nvidia's fiscal first quarter of 2027 (the period ended April 26, 2026) was staggering for a company its size. Revenue rose 85% year over year to $81.6 billion, and data center revenue -- the heart of the AI story -- climbed 92% to $75.2 billion. For perspective, Nvidia's data center business alone is now about 13 times the size of AMD's entire data center segment.</p><div><div id="foolcom_sidebar_top_container"><div><div><div></div><div></div><div></div></div></div><div></div></div></div>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Nvidia Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL05WREEucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL05WREEucG5nJnc9MTI4"/></div><div><h2>NASDAQ: NVDA</h2><div>Nvidia</div></div></div><div><div><div>Today's Change</div><div>(-0.93%) $-1.85</div><div>Current Price</div><div>$198.19</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$4.8T</div><div>Day's Range</div><div>$196.59 - $201.64</div><div>52wk Range</div><div>$149.26 - $236.54</div><div>Volume</div><div>4.4M</div><div>Avg Vol</div><div>161.7M</div><div>Gross Margin</div><div>74.15%</div><div>Dividend Yield</div><div>0.14%</div></div></div></div></section>
<p>Even more, Nvidia's growth rate isn't slowing. Nvidia guided for revenue of about $91 billion in its fiscal second quarter, which at the midpoint would be up about 95% from a year earlier. And that figure assumes no data center compute revenue from China at all.</p><div></div>
<p>Then there are the margins. Nvidia's non-GAAP (adjusted) gross margin was 75% in the quarter -- a level that shows how much pricing power the company still commands. Management also notably raised the dividend and added $80 billion to its buyback authorization, returning about $20 billion to shareholders during the quarter.</p><div><div id="in_line_article_pitch_container"><div><div><div><div></div></div><div><div></div><div></div><div></div></div></div></div><div></div></div></div>
<h2>AMD: a solid but less impressive growth story</h2>
<p>AMD is executing well, too.</p>
<p>Its first-quarter 2026 revenue rose 38% year over year to $10.3 billion, with data center revenue up 57% to $5.8 billion as its EPYC processors and Instinct GPUs gained ground. Adjusted earnings per share grew 43% to $1.37, and the company generated a record $2.6 billion in free cash flow.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Advanced Micro Devices Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FNRC5wbmcmdz0xMjg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FNRC5wbmcmdz0xMjg"/></div><div><h2>NASDAQ: AMD</h2><div>Advanced Micro Devices</div></div></div><div><div><div>Today's Change</div><div>(-0.02%) $-0.11</div><div>Current Price</div><div>$519.74</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$848B</div><div>Day's Range</div><div>$503.50 - $524.96</div><div>52wk Range</div><div>$133.50 - $562.99</div><div>Volume</div><div>26.5M</div><div>Avg Vol</div><div>37.7M</div><div>Gross Margin</div><div>47.09%</div></div></div></div></section>
<p>And the competitive case is improving, too. AMD's next-generation Instinct lineup is drawing larger commitments from big AI customers, and management guided for about 46% revenue growth in the second quarter.</p>
<p>The company has carved out a genuine position as the main alternative to Nvidia.</p>
<p>But two gaps are hard to ignore. First, AMD's growth rate is well below Nvidia's, not above it. And its adjusted gross margin of about 55% trails Nvidia's by roughly 20 percentage points -- a reflection of Nvidia's stronger pricing power and full-stack platform.</p>
<h2>Which is the better buy?</h2>
<p>This is where valuation arguably seals the deal when comparing the two. After the pullback, Nvidia trades at about 31 times earnings. That is hardly a demanding price for a company growing 85% a year, with 75% gross margins and a leading position in the fastest-growing corner of the chip market.</p>
<p>AMD, meanwhile, trades at a price-to-earnings ratio of about 170 -- even after its recent dip. A multiple like that prices in years of flawless execution and major market share gains -- outcomes that are possible but far from guaranteed, especially as memory-chip cost inflation pressures margins across the industry.</p>
<p>Even when looking at the company's forward valuation multiples, or their valuations based on analysts' consensus earnings forecasts over the next 12 months, Nvidia has a forward price-to-earnings ratio of 23, and AMD's is 74 -- a huge difference.</p>
<p>Of course, both stocks come with risks. Both depend on AI infrastructure spending staying strong, both face tightening export rules on chips bound for China, and a valuation reset like the one investors just lived through can always get even worse.</p>
<p>Still, when one company is growing faster, earning much higher margins, leading its market, and trading at a fraction of the other's valuation, the decision gets easier.</p>
<p>After this sell-off, Nvidia looks like the more attractive buy of the two.</p><div id="article_pitch_container"><div><div><div></div><div></div><div></div><div></div><div></div><div></div><div></div></div></div><div></div></div><div id="promobox_container"><div><div><div></div><div></div><div></div><div></div></div></div><div></div></div>

NVDA

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<p>Following a semiconductor sell-off, Nvidia appears to be the better buy compared to AMD. Nvidia demonstrates superior growth (85% YoY revenue increase), higher gross margins (75%), and a more attractive valuation (31x P/E) than AMD (170x P/E). Despite AMD's solid performance, Nvidia's dominant market position, pricing power, and lower risk profile make it the more attractive investment opportunity after the recent dip.</p>

- The semiconductor stock sell-off has significantly impacted companies like Nvidia and AMD, with Nvidia showing exceptional growth and market dominance.  
- Nvidia's revenue rose 85% to $81.6 billion in its fiscal first quarter, while AMD's grew 38% to $10.3 billion, highlighting Nvidia's superior growth and higher margins.  
- Given Nvidia's strong financials and more favorable valuation relative to AMD, it appears to be the better investment option post-sell-off.

Better Buy After the Chip Sell-Off: Nvidia or AMD?