NVIDIA or AMD: If I Could Only Own 1 for the Next Decade, This Is It Joel South Wed, October 7, 2026 at 8:45 AM EDT 5 min read AMD +2.80% NVDA +0.14% META -0.41% META PLATFORMS Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
NVDA trades at a cheaper 25x vs AMD's 40x forward earnings, yet generates 13x more quarterly data center revenue.
META committed up to 6 GW of AMD MI450 capacity, but Jensen Huang says NVDA supply covers only 70% of current demand.
Jensen Huang acknowledged nearly $50B in AI lab financing could represent a quarter of next year's business, creating potential circular financing risk.
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NVIDIA (NASDAQ:NVDA) or Advanced Micro Devices (NASDAQ:AMD): If a retirement-focused investor could own only one AI chip stock for the next decade, which one should it be right now?
My pick is NVIDIA, and AMD's recent rally doesn't change that. AMD shares rose 221% over the past year, while NVIDIA gained 31%. A 10-year holding period, though, rewards durability more than momentum. So I compared the two on three things: franchise strength, profitability and valuation against growth.
In fiscal Q2 2027, NVIDIA's Data Center revenue reached $89.02 billion (+117% YoY). AMD's Data Center segment brought in $6.72 billion (+107% YoY) and now makes up 58% of revenue. Both businesses are doubling, but NVIDIA is doing it from a far larger base.
AMD's best argument is its customer list. Anthropic plans to deploy up to 2 GW of MI450, Meta Platforms (NASDAQ:META) has committed to up to 6 GW, and OpenAI has signed on for 6 GW. AMD also expects Data Center revenue to more than double year-over-year in 2027. That is real evidence that buyers want a second supplier.
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NVIDIA's answer is that it can't build enough to meet demand. Jensen Huang said it has "supply for 70%" of demand, and management expects fiscal 2028 revenue to grow approximately 70%. Each new platform also earns more per unit of capacity. Revenue per gigawatt rises from $25 billion on Blackwell to $40 billion on Vera Rubin.
NVIDIA reports a 71.1% gross margin, a 60.4% operating margin, a 55.6% net margin and 101.5% ROE. AMD's figures are 49.5%, 10.7%, 12.5% and 7.2%.
AMD's margins are improving quickly. Operating income reached $1.99 billion vs $118 million prior year. But AMD's own management said data center AI gross margin runs slightly below the corporate average, so its fastest-growing business holds the overall margin down. Free cash flow shows the same gap.
NVIDIA generated $21.34 billion in the quarter, compared with AMD's $1.56 billion (-9.9% YoY). NVIDIA also returned a record $26 billion to shareholders in Q2, while AMD pays no dividend.
NVIDIA is the bigger company and also the cheaper stock. NVIDIA changes hands at about 25x forward earnings, compared with 40x for AMD. Its PEG ratio, which divides the P/E by expected growth, is 0.479 versus 0.626. On price to free cash flow, NVIDIA gets 58 and AMD 155. Analysts are also raising their NVIDIA numbers. The fiscal 2028 EPS estimate of $15.6951 saw 42 upward revisions and zero down revisions in 30 days.
The biggest risk is customer financing. NVIDIA has committed nearly $50 billion in leading AI labs. It says demand from labs it expects to support with its own balance sheet could make up roughly a quarter of its business next year. Huang acknowledged the concern: "We know some will call this circular financing." If those labs stop earning money on their AI services, or if in-house chips take over inference work, NVIDIA would lose both demand and pricing power at once. Memory costs are another pressure, and gross margin is expected to bottom at 71% to 72% in Q4.
NVIDIA wins all three categories, and its track record backs that up. Over 10 years, NVIDIA returned 13,861.48% and AMD returned 8,994.84%. NVIDIA also has the lower beta, a measure of volatility relative to the market: 2.217 versus 2.476. AMD fits an aggressive growth investor willing to pay 40x forward earnings for the chance to gain market share. For a retirement portfolio that has to hold up through a full chip cycle, NVIDIA holds the stronger case. Next, keep an eye on the Vera Rubin ramp and whether NVIDIA meets its Q3 revenue guidance of $108 billion ±2%.
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