NVIDIA vs. AMD: AI/Data Center Positioning, Valuation, and Oversold Technical Signals Analysis

Both NVIDIA and AMD experienced significant pullbacks from their October 29, 2025 peaks: NVIDIA fell ~17.7% to a low of $169.55 by December 19, 2025, while AMD declined ~26.5% to $194.28 over the same period [0]. Valuation metrics highlight a stark contrast: NVIDIA trades at a forward P/E of 25x (11th percentile of its 10-year valuation range), making it relatively undervalued compared to peers [1]. In contrast, AMD commands a premium 42x forward P/E (2026E) based on consensus EPS projections of ~$5.12 [3].

In the AI/data center segment, NVIDIA maintains an 80-90% dominant market share, generating $51.2B in data center revenue (90% of total sales) with a 73.6% gross margin in Q3 FY2026 (ended October 2025) [2]. AMD’s data center revenue reached $4.3B in Q3 2025 (46.5% of total revenue) and is poised for growth after securing a multi-year partnership with OpenAI to deploy up to 6 gigawatts of Instinct GPUs starting in 2H 2026 [3][4]. Technical analysis shows both stocks traded sideways from October to December 2025, with KDJ indicators signaling bullish momentum and pullbacks suggesting oversold conditions [0].

1. NVIDIA’s Valuation Attractiveness
   : With its 25x forward P/E below big tech peers and dominant market position, NVIDIA offers stable AI exposure for investors prioritizing valuation and market leadership [5].
2. AMD’s Growth Potential
   : The OpenAI partnership (valued at $90–100B over time) and 31% projected 2026 revenue growth justify its premium valuation, though execution risk remains high for meeting large-scale deployment deadlines [3].
3. Shared Regulatory Risks
   : Both companies face potential AI chip export restrictions (notably to China), which could impact revenue streams and market dynamics [2].

• Risks
  : Regulatory restrictions on AI chip exports pose a significant headwind for both [2]. AMD must execute on its OpenAI GPU deployment timeline to deliver on growth expectations [3], while NVIDIA faces pressure to maintain its market share amid increasing competition. Sector-wide valuation volatility could lead to further pullbacks if growth targets are unmet.
• Opportunities
  : NVIDIA’s undervalued 25x forward P/E presents an opportunity for investors seeking discounted AI exposure [1]. AMD’s OpenAI partnership offers a path to accelerated growth and market share gains in the AI chip segment [3].

This analysis synthesizes the following critical data:

• NVIDIA: ~17.7% pullback from peak, 25x forward P/E, 80-90% AI chip market share, $51.2B Q3 data center revenue, 73.6% gross margin
• AMD: ~26.5% pullback from peak, 42x forward P/E, $4.3B Q3 data center revenue, OpenAI partnership for up to 6GW GPUs, 31% projected 2026 revenue growth
• Both stocks exhibit oversold technical signals and face shared regulatory risks, with AMD carrying additional execution risk for its partnership deliverables.

No prescriptive investment recommendations are provided; this analysis is for informational purposes to support decision-making.