AMD shares have sold off recently, even though the company has benefited from an AI chip shortage because Nvidia cannot meet all demand. The article argues that valuation is a bigger risk than the AI business, with AMD's P/E at 139 and forward P/E at 72, several times higher than Nvidia, Broadcom and Taiwan Semiconductor. If AMD's P/E fell to Nvidia's current level, the stock could lose close to 80% of its value. Still, the valuation is seen as more of a threat to the stock than to the company, since data center AI chips made up 58% of AMD's latest-quarter revenue versus almost 93% for Nvidia. The author reduced AMD holdings for diversification but kept a substantial long-term position.
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AMDNVDAvaluationsemiconductorsdata centers
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Related tickers and likely impact
NVDA
▼ Likely negativeNvidia
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.14 |
| Change that session | -1.42% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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