AMD vs NVIDIA 2023: Which is the Better Chip Stock by Numbers?

Are you interested in investing in the tech industry? If so, we bring you two of the biggest players in the game: AMD and NVIDIA. These two companies have seen, considerably,  impressive growth in 2023, but which represents the better chip stock?

Looking at numbers can give a  better idea of which company is performing better in the market. However, it’s not just about the numbers. The strength of these companies differ, and also, the risks they carry, such as high PE ratios.

This comparison aims to determine which company is the better chip stock by numbers. Also, we will take into account factors such as performance, pricing, and market share. While the question remains which is the better buy? Let’s take a closer look at AMD vs. NVIDIA and find out.

Key Statistics: AMD vs NVIDIA

• Nvidia slightly edges out AMD in power, while AMD takes the lead in terms of competitive pricing.
• Selecting a GPU is less about the brand and more about aligning with your personal preferences and computational requirements, and determining which top-tier graphics card meets those needs.
• The RTX 4060 Ti takes the lead as the top-performing GPU, with the RTX 4070, RTX 3060 Ti, RTX 4070 Ti, RTX 3070, and RTX 3060 trailing closely behind.
• AMD is poised to challenge Nvidia for the top performance title, though the professional sector might not be prepared for their arrival just yet.
• For cost-effective FPS per dollar ray tracing, the Arc A750 leads, followed by the RTX 3060 Ti, RTX 4070, RTX 3060, and Arc A770 8GB. AMD’s RX 6600 ranks ninth in DXR value, but the RX 6700 10GB is a better choice due to its superior DXR performance.
• In 2023, Nvidia’s stock experienced a remarkable surge of 214%, whereas AMD’s shares saw a more modest increase of 72%.
• Nvidia holds a leading position in the data center GPU market, whereas AMD plays a more minor role in this sector.
• Experts predict that Nvidia’s profits will rise by 33% this fiscal year, reaching $4.46 per share. 
• Conversely, AMD’s financial performance is projected to decline in 2023.
• AMD’s graphics card delivers a gaming performance that’s 25-35% superior to the Nvidia 3050 in typical scenarios.
• AMD’s economical GPUs, like the RX 5500 XT, deliver impressive performance for a reasonable cost.
• The Nvidia RTX 3080 distinctly overshadows all that AMD presents.
• Nvidia’s valuation is approximately triple that of AMD.
• AMD and Nvidia consistently rival each other in the gaming sector.

Direct Stock Performance Comparison

Analysts concur that AMD might outpace NVIDIA in near-term growth. However, it’s crucial to recognize that each company possesses unique advantages and associated risks. Let’s delve into their comparative analysis.8

NVIDIA

In the first quarter of 2023³, NVIDIA reported revenues of USD$7.192 million.

• Year-to-Date Growth

As of August 16, 2023¹, NVIDIA has experienced a remarkable year-to-date growth of 197.65%.

NVIDIA’s growth has significantly stemmed from the demand for its AI chips. The company leads in AI technology, and as more industries adopt AI, the demand for their products has surged.

AMD

In the second quarter of 2023⁴, AMD reported a revenue of USD$5.359 million.

• Year-to-Date Growth

AMD’s year-to-date growth up to August 16, 2023², stands at an impressive 78.50%.

The growth of AMD resulted from its Data Center and Embedded business segments, which experienced notable revenue increases.

AMD vs. NVIDIA: Historical Stock Price Trend 

AMD and NVIDIA design micro-chips, and their stock prices have varied throughout the years. The historical stock price data of these two companies over the year are compared below:

Year	NVIDIA Avg. Stock Price ($)5	AMD Avg. Stock Price ($)6
2014	4.42	3.66
2015	5.75	2.33
2016	13.22	5.26
2017	37.04	12.41
2018	57.61	17.22
2019	43.41	29.94
2020	98.64	65.62
2021	194.93	101.15
2022	185.53	90.89
2023	309.11	96.87

The Graphical Anatomy

Stock prices for firms like AMD and NVIDIA are affected by numerous factors. Among these determinants are product introductions, fiscal outcomes, and GPU market appetite. The  tech sector’s rivalry, global economic trends, investor views, and unforeseen events such as geopolitical tensions all play a role in shaping the stock market’s unpredictable behaviour.

Key Stock Price Milestones

AMD and NVIDIA have had their ups and downs in the stock market, with various factors affecting their valuations and potential for growth. However, some of the key stock price milestones are the following.

AMD

• In June 2023, many viewed AMD’s stock as a more dependable purchase than NVIDIA’s because of its lower cost.
• In June 2023⁷, the absence of software integration in AMD’s strategy emerged as a significant weakness, potentially hindering its growth.
• In April 2023⁹, AMD’s forward price-to-earnings ratio stood at 18, while NVIDIA’s was 44, showing that AMD’s stock offered better value.
• In August 2022⁸, analysts believed that for market valuations to align, either AMD’s stock should rise or NVIDIA’s should drop.
• In November 2019, experts predicted that AMD’s stock might yield returns comparable to NVIDIA’s over the subsequent 12 to 18 months.

NVIDIA

• In June 2023⁷, NVIDIA approached a valuation of $1 trillion, joining the elite ranks of Apple, Microsoft, and Alphabet.
• In August 2022⁸, NVIDIA reduced its projections due to a slump in gaming demand, whereas AMD was on track to meet its financial goals because of robust demand in data centers.
• By April 2023⁹, NVIDIA’s forward price-to-earnings ratio stood at 44, while AMD’s was at 18, showing that NVIDIA’s stock commanded a higher value.
• In November 2019, NVIDIA’s stock traded over 80 points below its high from the previous year, which was $292.76. At the same time, AMD had reached a 13-year peak and was nearing its all-time high from 2000 in the upper $40s.

Sources: Finance Charts¹, Barchart², Macrotrends³, Macrotrends⁴, Macrotrends⁵, Macrotrends⁶, The Motley Fool, The Motley Fool⁷, Seeking Alpha⁸, Nasdaq⁹, Investopedia

NVIDIA vs. AMD: The Financial Health

Metrics such as revenue, profit, debt-to-equity ratio, return on equity, and others are utilized to gauge the financial well-being of these major tech firms. In this segment, we’ll concentrate solely on the afore-mentioned indicators.

Revenues for the Last Decade

Here are the stock revenues for NVIDIA and AMD over the last decade.

Year	NVIDIA Stock Revenues($m)1	AMD Stock Revenues($m)2
2013	4.28	5.30
2014	4.13	5.51
2015	4.68	3.99
2016	5.01	4.32
2017	6.91	5.25
2018	9.71	6.48
2019	11.72	6.73
2020	10.92	9.76
2021	16.68	16.43
2022	26.91	23.60

The Graphical Anatomy

• NVIDIA

• AMD

Over the past decade, NVIDIA and AMD experienced significant revenue growth. While NVIDIA typically led, AMD significantly narrowed the gap by 2021. Both companies excelled in 2021 and 2022, suggesting a flourishing market or effective strategies. Recently, AMD has been increasingly competitive in revenue against NVIDIA.

The Debt-to-Equity Ratio for Previous Quarters 

The debt-to-equity ratio gauges a company’s financing from debt versus equity. A higher ratio shows more reliance on debt, while a lower one indicates a preference for equity. Let’s delve into the examination of the ratios observed during the previous ten quarters.

Quarters Evaluations: The first quarter of 2023 downwards.

Year	NVIDIA Debt to Equity Ratio3	AMD Debt to Equity Ratio4
Q4 2020	0.70	0.54
Q1 2021	0.64	0.55
Q2 2021	0.83	0.51
Q3 2021	0.71	0.56
Q4 2021	0.66	0.66
Q1 2022	0.72	0.21
Q2 2022	0.82	0.22
Q3 2022	0.90	0.24
Q4 2022	0.86	0.23
Q1 2023	0.81	0.24

The Graphical Anatomy

• NVIDIA

From the graph, it’s evident that NVIDIA’s debt-to-equity ratio has seen fluctuations over the quarters, with a general upward trend, especially from Q4 2021 to Q3 2022. This suggests an increasing reliance on debt for financing during this period.

• AMD

The graph highlights a significant drop in the debt-to-equity ratio for AMD starting from Q1 2022. This indicates a shift in their financing strategy or a change in their financial position during this period.

While both companies operate in the tech industry, they have showcased different financing strategies over the past ten quarters. NVIDIA leaned more towards debt, while AMD shifted its approach to rely more heavily on equity in the recent quarters.

Return on Equity for Previous Quarters

Return on Equity (ROE) measures a company’s profitability against its shareholders’ equity, indicating its efficiency in using equity for profit. A higher ROE shows effective profit generation, while a lower one suggests inefficient equity use.

Quarters Evaluations: The first quarter of 2023 downwards.

Year	NVIDIA Return on Equity5	AMD Return on Equity6
Q4 2020	29.25%	3.27%
Q1 2021	32.82%	7.33%
Q2 2021	39.25%	10.23%
Q3 2021	40.72%	12.15%
Q4 2021	43.18%	15.23%
Q1 2022	38.65%	17.44%
Q2 2022	30.78%	18.60%
Q3 2022	24.28%	20.89%
Q4 2022	18.66%	20.78%
Q1 2023	20.88%	18.37%

The Graphical Anatomy

• NVIDIA

This trend is evidence that NVIDIA was highly efficient in using its equity to generate profits during 2021. However, there was a decline in this efficiency in 2022, with a slight recovery at the start of 2023.

• AMD

The data suggests that AMD has been progressively improving its efficiency in terms of profit generation from its equity. However, there was a slight decline in the most recent quarter.

While NVIDIA started with a much higher ROE, its efficiency in generating profits from equity decreased in the latter quarters. In contrast, AMD consistently improved its efficiency over the same period, despite starting from a lower base.

Sources: Macrotrends¹, Macrotrends², Macrotrends³, Macrotrends⁴, Macrotrends⁵, Macrotrends⁶,

NVIDIA vs. AMD: Market Share and Growth

NVIDIA and AMD both earn revenues from Data Centers, Autonomous Vehicles, Gaming, among other sectors. However, they have distinct market shares and growth patterns. The subsequent data offers a clear differentiation.

Market Share

The data below highlights the market share of NVIDIA and AMD during the fourth quarters from 2016 to 2022.

Quarters (Q4)	NVIDIA (%)	AMD (%)
20161	70.5	29.5
20171	66.3	33.7
20181	81.2	18.8
20191	68.92	31.08
20201	83.00	17.00
20212	88.00	8.00
20223	84.00	11.00

The Graphical Anatomy Using the Spider Plot

While both NVIDIA and AMD are key players in their industry, NVIDIA has managed to maintain a dominant position over the years. AMD, despite its fluctuations, remains a significant competitor, showcasing resilience and potential for growth.

Market Growth

The market growth reflects how much the market has expanded over a given period. A growing market can indicate increased consumer interest, effective marketing, or new product introductions. Otherwise, declining market growth might suggest market saturation, increased competition, or external industry challenges.

Below is the table representing the NVIDIA and AMD market growth over a given period of three years.

Yearly Growth	NVIDIA (%)	AMD (%)
2019-2020	52.63%	45.05%
2020-2021	61.4%	68.33%
2021-2022	0.22%	43.61%

Graphical Anatomy

NVIDIA saw robust growth until 2020 but sharply declined in 2021-2022 to just 0.22%. AMD consistently grew, peaking in 2020-2021 at 68.33% and outpacing NVIDIA in recent years. Overall, NVIDIA’s growth slowed, while AMD’s remained strong.

Sources: Business Quant¹, Seeking Alpha², Tom’s Hardware³, Macrotrends⁴, Macrotrends⁵ 

AMD vs. NVIDIA: Product Innovations and Roadmap

Similar to NVIDIA, AMD has introduced numerous product innovations that influenced its stock prices. We will analyse these product innovations and roadmaps of both companies  in the following sub-headings.

NVIDIA

From 2017 to 2023, NVIDIA primarily sourced its revenue from gaming, automotive, data centers, and professional visualisation. All these revenue figures are presented in $millions in the table below.

Years	Gaming	Automotive	Data Center	Professional Vis.	OEM&Others
20171	4.06	0.487	0.830	0.835	0.98
20181	5.513	0.558	1.932	0.934	0.777
20191	6.246	0.641	2.932	1.130	0.767
20201	5.518	0.700	2.983	1.212	0.505
20211	7.759	0.536	6.696	1.053	0.631
20221	12.462	0.566	10.613	2.111	1.162
20231	9.067	0.903	15.005	1.544	0.455

NVIDIA’s primary revenue driver is its gaming segment, followed closely by its rapidly growing data center segment. While the gaming revenue looks like a dip in the ongoing 2023, the data center revenue continued its upward trajectory. This highlights NVIDIA’s expanding presence in that sector. 

The other segments have seen fluctuations, with the automotive and professional visualisation sectors showing potential growth areas. The OEM & Others segment, however, seems to be more volatile.

AMD

Based on AMD’s 2022 financial results, the company actively showcases its strength across four key segments: Gaming, Clients, Embedded, and Data Center. The table below provides the revenue for the year in these segments.

Segments	Revenues ($)2
Data Center	1.7 billion
Gaming	1.6 billion
Clients	903 million
Embedded	1.4 billion

In 2022, AMD demonstrated a diversified and robust revenue portfolio. The Data Center and Gaming segments were the primary drivers of their revenue, highlighting the company’s strong foothold in these markets. 

The substantial revenue from the Embedded segment also indicates AMD’s versatility and wide-ranging market presence. While the Clients segment generated the least revenue, it remains a significant part of AMD’s business.

Sources: Statista¹, AMD² 

AMD vs. NVIDIA: Dividends and Shareholder Returns

As of June 30th, 2023, NVIDIA’s dividends per share stood at $0.04.

While NVIDIA has been distributing dividends to its shareholders, AMD has yet to begin any such payouts as of now.

The table below displays NVIDIA’s Ex-dividend/Effective Date and the corresponding dividend amount received by its shareholders.

Ex/EFF DATE1	Cash Amount1
6/7/2023	$0.04
3/7/2023	$0.04
11/30/2022	$0.04
9/7/2022	$0.04
6/8/2022	$0.04
3/2/2022	$0.04
12/1/2021	$0.04
8/31/2021	$0.04
6/9/2021	$0.16
3/9/2021	$0.16

NVIDIA has been regularly rewarding its shareholders with dividends. While the company maintained a consistent dividend of $0.04 per share for most of the observed period, there was a higher payout of $0.16 per share in the early months of 2021. This could indicate a particularly strong financial performance or a strategic decision by NVIDIA during that time.

Sources: Nasdaq¹ 

Analyst Recommendations

Analysts hold diverse views on the investment potential of AMD and Nvidia. Here’s a breakdown of their recommendations for each stock:

Recommendation	NVIDIA	AMD
Buy1	35	37
Sell1	7	1

Graphical Anatomy

From the given data, analysts rate both companies highly. Yet, AMD has a slight edge with more ‘Buy’ recommendations and fewer ‘Sell’ suggestions than Nvidia. Keep in mind, these recommendations can shift based on market dynamics and the companies’ performances.

Sources: Seeking Alpha¹ 

Conclusion

NVIDIA and AMD are leading GPU manufacturers. However, choosing to invest in AMD or NVIDIA necessitates thorough analysis, considering both companies’ financial health, current market dynamics, and your individual investment goals. Consulting a financial expert can further aid in making an informed decision.

Frequently Asked Questions (FAQs)