NVIDIA is printing $44 billion in sales, and AMD just grew its net income by 230%. But here’s the kicker, one of these companies is twenty times more profitable than the other, and yet the underdog might actually have the bigger upside.
Who are NVIDIA and AMD?
NVIDIA, by any metric, is the clear leader in accelerated computing and artificial intelligence. The company is best known for its graphics processing units, and it has built a platform that powers everything from video games to the world’s most advanced AI models.
Its CUDA software ecosystem is the backbone of AI development, while its H100 and H200 chips dominate large language model training.
NVIDIA isn’t just about GPUs, though. It’s not often mentioned, but Nvidia also invests in networking with its Spectrum-X platform, as well as in quantum computing.
AMD, or Advanced Micro Devices, competes with NVIDIA in many of the same markets but with a different angle.
For context, it powers CPUs like Ryzen for personal computers, EPYC processors for servers, and Instinct accelerators such as the MI300X and MI308, which are starting to rival NVIDIA in AI workloads.
AMD has built its reputation on delivering strong price-performance, winning design wins in gaming consoles, data centres, and now AI. On the horizon, AMD is betting big on its MI400 architecture, expected to be released by 2026, to close the performance gap in AI computing.
Now, the clear overlap is both fight for a share in GPUs and AI accelerators, and both depend on U.S. export approvals to sell into China. But their scaling is different from each other. NVIDIA dominates in both revenue and market share, while AMD is the challenger with significant potential.
Financials
Now, let’s look at the difference between their numbers.
Let’s start with AMD. The company reported sales of $7.7 billion, representing a 31.7% year-over-year increase.
Its net income came at $872 million, jumping nearly 230%.
Breaking down the segments, its Data Centre business was up 14.3%, Client and Gaming jumped almost 70%, while Embedded slipped 4.3%. That’s impressive growth, but remember, it’s growth off a smaller base.
Now, NVIDIA’s sales are up 69.2% from the same quarter last year, reaching $44.1 billion. Its net income rose 26.2% to $18.8 billion.
With that, you might ask who’s leading? On revenue growth, Nvidia wins. But AMD’s net income is up almost 230%, which is impressive. But quantifying it further, the competition is not even close. NVIDIA is six times larger in revenue and twenty times larger in net income.
While AMD is showing significant momentum, NVIDIA remains the clear favourite in the industry.
Business Model
With numbers out of the way, let’s look at how Nvidia does it all in the first place.
Like what most people know, NVIDIA makes money by selling GPUs, those chips that power AI, gaming, and data centres., The company also sells the software and networking tools that go with its system. Once customers start building on NVIDIA’s CUDA platform, they tend to stick, because everything from code to infrastructure is already in place. That makes NVIDIA’s revenue thrive.
AMD, on the other hand, generates most of its revenue by selling chips such as Ryzen CPUs for PCs, EPYC for servers, and Instinct accelerators for AI. Its model is more straightforward: offer strong performance at a lower price to win over customers. Think of it as competing on price-to-performance, rather than ecosystem lock-in.
So yeah, NVIDIA sells the whole package, including the hardware plus the ecosystem around it. AMD sells powerful chips at competitive prices, winning customers slowly but steadily.
Profitability
So, with AMD growing rapidly and NVIDIA operating on a much larger scale, the real story, and what investors would like to know, emerges when we shift from revenue to profit.
Put, for every dollar NVIDIA makes in sales, it keeps more than fifty cents as profit. For a company of this size, that’s straight up impressive.
Meanwhile, AMD, with margins around 6% and a 230% net income jump year-over-year, is a headturner, but it’s still much thinner than NVIDIA.
From what I can see, Investors are paying up for NVIDIA’s consistency and fat margins, while AMD is still proving it can scale profits as it expands.
Dependence on the Government
Now, let’s discuss a major catalyst that sparked speculation over AMD and NVIDIA, specifically government policy – namely, U.S. export rules to China.
Last quarter, AMD and Nvidia delivered growth despite not having a single sale of AI chips in China.
In AMD’s latest earnings announcement, its management provided no guidance on China, despite the possibility of licenses becoming available. It was previously determined that the missed sales opportunity in China was estimated to be $800 million.
Now, both companies are reportedly given the green light to export once again. And they might already be. The catch? Both AMD and NVIDIA have allegedly agreed to a 15% revenue share with the U.S. government on China AI chip sales, which is a sort of ‘policy tax’ that will eat into their margins if pricing can’t offset it.
Now, NVIDIA’s exposure is bigger. China used to be a double-digit-billion-dollar market. The company is reportedly resuming shipments under current rules with its H20 chip, a lower-spec version designed to comply with export limits.
That re-opens demand, but with constraints as the market seeks a stronger chip, which competitors could soon fill. And like AMD, NVIDIA is also subject to the 15% revenue-share rule, which turns every China sale into a margin contraction. For a company with such a slim margin, I can only see one way out: increasing costs.
The Path Forward
NVIDIA’s path is clear. The company is doubling down on dominance with new chips and full-stack infrastructure. I think it’s looking good in China as it will regain the market after shipping the H20 under export rules and already working on a new Blackwell-based part to keep that demand alive. Looking ahead, the roadmap is stacked with Blackwell Ultra, Rubin, Rubin Ultra, and Feynman, each promising significant leaps in AI performance.
On the other hand, AMD’s path is quite different. Growth has come without China, but licenses could unlock billions in new sales at the very least – but we’ll have to wait and see. Additionally, the MI350 is now shipping, and the MI400 is expected to arrive in 2026, featuring significant performance improvements. Additionally, they’re transitioning to complete systems with Helios infrastructure.
The only question that could be asked of both companies is: can they deliver on their promises?
Investment Decision
In my opinion, NVIDIA is the safer bet today, while AMD presents a potential upside story for tomorrow.
If you’re looking for a proven company with big margins, Nvidia’s probably the best bet. But if you’re looking for a stock with a higher potential for growth, AMD looks like it has a lot going for it, too.
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