AMD Just Joined Nvidia in the $1 Trillion Club. At $614, Wall Street Is Paying Too Much for a Distant No. 2.

AMD hit a $1 trillion market cap this week, joining NVDA in the elite club, but investors may be paying a steep premium for a distant runner-up. Despite landing major customers including OpenAI, META, Anthropic, ORCL, and MSFT, AMD's data center revenue of $6.7 billion per quarter trails far behind NVDA's $89 billion quarterly haul—a 13-fold gap that underscores the chasm in AI accelerator market share.

Valuation metrics amplify the concern. AMD trades at a price-to-earnings ratio of 158, with a forward P/E of 81, while NVDA commands a P/E of just 28 and a forward P/E of 24. The inversion is stark: investors are paying roughly six times NVDA's forward earnings multiple for a company with a fraction of its data center scale and thinner margins. The $614 share price bakes in aggressive growth assumptions that leave little room for execution missteps or share gains that fail to materialize at the pace the market expects.