The reliable way to compare Nvidia and AMD is to calculate P/E, price-to-sales (P/S), and a clearly defined cash-flow multiple from the same share-price date and comparable accounting periods. A lower ratio is not automatically a cheaper stock: growth, margins, dilution, capital spending, working-capital movements, and the durability of demand determine what each multiple may be pricing in.
The latest reported periods are not synchronized. Nvidia’s fiscal Q2 2027 ended July 26, 2026, while AMD’s fiscal Q2 2026 ended June 27, 2026. Their latest annual years also end on different dates. Use the process below to build trailing-twelve-month (TTM) figures or label any fiscal-year comparison precisely.
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What makes an Nvidia-versus-AMD valuation comparison valid?
Every multiple has two essential inputs: a market value measured on a specific date and a financial denominator covering a specified period. Combining Nvidia’s share price from one day with AMD’s earnings from another period can create a precise-looking but misleading result.
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For per-share calculations, use diluted shares and diluted EPS consistently. For market-capitalization calculations, use the same equity-value concept for both companies. If one company’s figure is GAAP and the other’s is adjusted, the comparison is not like-for-like.
Periods currently available for reference
| Company and period | Revenue | Earnings or cash-flow figure | How to use it |
|---|---|---|---|
| Nvidia fiscal 2026, year ended January 25, 2026 | $215.9 billion | Diluted EPS $4.90 | Annual reference; not the same dates as AMD fiscal 2025 |
| AMD fiscal 2025, year ended December 27, 2025 | $34.6 billion | Operating cash flow from continuing operations $6.5 billion | Annual reference; period ends earlier than Nvidia fiscal 2026 |
| Nvidia fiscal Q2 2027, quarter ended July 26, 2026 | $96.2 billion | Net income $59.7 billion; diluted EPS $2.46 | One quarter only; not a TTM denominator |
| AMD fiscal Q2 2026, quarter ended June 27, 2026 | $11.536 billion | Net income $2.297 billion; GAAP diluted EPS $1.38 | One quarter only; not a matched Nvidia quarter |
These figures come from the companies’ fiscal filings and annual reports. To calculate a current TTM multiple, add the latest four quarters for each company rather than multiplying one quarter by four. If you use the annual numbers above, label them as Nvidia fiscal 2026 and AMD fiscal 2025 instead of presenting them as a matched-year comparison.
How do you compare Nvidia and AMD stock valuations?
- Choose one closing-price date. Record each company’s closing share price and the date. If you use market capitalization, record the shares outstanding used to produce it.
- Choose the accounting period. Build TTM revenue, net income, operating cash flow, and free cash flow from four quarters, or use clearly labeled annual figures.
- Choose the accounting basis. Use GAAP for both companies as the baseline. If you use adjusted or non-GAAP figures, apply the same definition and disclose what is excluded.
- Calculate each multiple. Use the formulas in the sections below, keeping the numerator date and denominator period visible in your worksheet.
- Interpret the ratios with operating evidence. Compare growth, margins, cash conversion, capital expenditure, working capital, dilution, revenue mix, and business risks before drawing a conclusion.
A practical worksheet should have separate columns for company, price date, share price, diluted shares, market capitalization, denominator period, revenue, diluted EPS, net income, operating cash flow, capital expenditures, free cash flow, and the resulting ratios. This audit trail makes it possible to reproduce or update the comparison when a new filing arrives.
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Price-to-earnings measures the price investors pay for a dollar of earnings. The per-share formula is:
P/E = share price ÷ diluted EPS
At the equity level, the equivalent formula is:
P/E = market capitalization ÷ net income
Use diluted TTM EPS and a share price from the same valuation date for a TTM P/E. Alternatively, use annual diluted EPS and call the result a fiscal-year P/E. The two approaches should be directionally consistent when share counts and periods align, but they will not be identical if the share count changes or if the price date differs from the fiscal year-end.
GAAP, adjusted, trailing, and forward P/E
GAAP P/E uses GAAP net income or diluted EPS. Adjusted P/E removes items defined by the company or the analyst, such as certain stock compensation, restructuring costs, acquisition-related expenses, or other charges. Neither basis is automatically superior, but mixing Nvidia GAAP EPS with AMD non-GAAP EPS can make one company appear to have a lower multiple simply because more expenses were excluded.
Trailing P/E uses earnings already reported, normally the latest four quarters. Forward P/E uses an estimate for future earnings. A forward ratio can be useful when earnings are changing rapidly, but it is an expectation, not an observed result. Record the estimate date, source, fiscal year, and whether the estimate is GAAP or adjusted. Do not compare Nvidia’s trailing P/E with AMD’s forward P/E and call the difference a valuation gap.
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P/E becomes difficult to interpret when earnings are negative, close to zero, unusually depressed, or temporarily inflated. In those cases the ratio can be negative, extremely high, or mathematically undefined. Switch attention to revenue, operating cash flow, normalized margins, and a clearly explained earnings outlook instead of forcing a ranking.
How does price-to-sales add information?
Price-to-sales compares equity value with revenue:
P/S = market capitalization ÷ revenue
Use revenue from the same TTM or fiscal period for both companies. A per-share version can be written as share price divided by revenue per diluted share, but market capitalization divided by total revenue is usually easier to audit.
Revenue is less affected by operating expenses, interest, taxes, and accounting choices than net income. That makes P/S useful when earnings are volatile or when a business is still investing heavily. It also makes P/S incomplete: two companies can have the same sales multiple while producing very different gross margins, operating margins, tax outcomes, and cash flows.
For example, a high P/S may be reasonable only if the business can convert additional sales into durable profit and cash. If growth requires heavy discounts, rising inventory, large capital expenditures, or continual share issuance, sales alone do not justify the multiple. Compare P/S with historical growth, gross and operating margins, and cash conversion rather than treating it as a substitute for P/E.
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Cash-flow multiples require an explicit denominator definition. Two common equity-oriented measures are:
Price-to-operating-cash-flow = market capitalization ÷ cash from operating activities
Price-to-free-cash-flow = market capitalization ÷ free cash flow
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A common free-cash-flow convention is:
Free cash flow = cash from operating activities − capital expenditures
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Apply the same convention, period, and treatment of discontinued operations to both companies. State whether capital expenditures mean purchases of property and equipment only or another company-specific definition. If you use a vendor’s free-cash-flow figure, verify its formula rather than assuming all providers calculate it identically.
Why operating cash flow can jump or fall
Operating cash flow is affected by working-capital timing. Inventory purchases, customer receivables, supplier payables, contract liabilities, and other operating assets and liabilities can move cash in one quarter without representing a permanent change in earning power. AMD’s fiscal 2025 filing describes cash outflows from changes in operating assets and liabilities, including inventory buildup. A single quarter or year therefore may not be a stable run rate.
Free cash flow also reflects investment choices. A company building capacity or buying equipment may report lower free cash flow while pursuing growth; another company may defer spending and show temporarily stronger free cash flow. Read capital-expenditure notes and the cash-flow statement rather than treating the highest cash-flow multiple as automatically expensive or the lowest as automatically attractive.
What do the latest Nvidia and AMD filings show?
Nvidia’s reported scale and growth
Nvidia reported fiscal 2026 revenue of $215.9 billion and diluted EPS of $4.90 for the year ended January 25, 2026. Revenue increased 65% year over year. Nvidia’s fiscal 2026 annual report describes the result this way: “Fiscal 2026 marked another year of strong growth for NVIDIA, with revenue surging 65% year on year to $215.9 billion reflecting continued momentum across our platform transitions to accelerated computing and AI.”
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Its fiscal Q2 2027 filing, for the quarter ended July 26, 2026, reported revenue of $96.2 billion, net income of $59.7 billion, and diluted EPS of $2.46. Those are quarterly observations. They cannot replace a four-quarter TTM denominator in a comparison with AMD.
AMD’s reported revenue, earnings, and cash
AMD reported fiscal 2025 revenue of $34.6 billion for the year ended December 27, 2025, and operating cash flow from continuing operations of $6.5 billion. Its fiscal Q2 2026 filing, for the quarter ended June 27, 2026, reported revenue of $11.536 billion, net income of $2.297 billion, and GAAP diluted EPS of $1.38. The same filing reported $5.3 billion of cash from operating activities for the first six months of fiscal 2026; six-month cash flow should not be presented as a full-year figure.
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AMD’s fiscal Q2 2026 data-center revenue was $6.7 billion, up 107% year over year. AMD explains that the comparison includes the absence of prior-year inventory and related charges associated with U.S. government export controls on its MI308 data-center GPU products. That unusual prior-year context means the growth rate should be read alongside the underlying revenue base and charges, not extrapolated mechanically into a valuation model.
AMD’s Q2 2026 earnings presentation includes both GAAP and non-GAAP results. Use the GAAP diluted EPS figure for a baseline P/E comparison with Nvidia, or show non-GAAP for both companies with the adjustment definitions displayed next to the ratios. AMD’s fiscal 2025 annual report was amended to correct transposed client-unit-shipment and average-selling-price growth disclosures; use the amended filing for those specific client disclosures.
Why growth and margins change the meaning of a multiple
A multiple is a compact expression of market expectations. Two companies can trade at different P/E or P/S ratios because investors expect different growth rates, margins, reinvestment needs, competitive positions, or risk.
Growth rate and starting base
Compare year-over-year growth using aligned periods and identify the base period. A very high percentage can partly reflect an unusually low or charge-affected prior period. AMD’s data-center comparison illustrates why the reported percentage and the accounting context belong together. Nvidia’s 65% fiscal 2026 revenue growth is an annual figure, while AMD’s 107% data-center growth is a quarterly segment comparison; they are not interchangeable growth measures.
Margins and earnings conversion
P/S needs a margin bridge. Examine gross margin, operating margin, net margin, and whether margins are expanding or contracting. A company with a higher P/S but much higher and more durable margins may generate more earnings per dollar of sales than a company with a lower P/S. P/E already reflects current earnings, but margin sustainability still determines whether those earnings can persist.
Cash conversion and reinvestment
Compare operating cash flow with net income and calculate free-cash-flow conversion, such as operating cash flow divided by net income, while explaining unusual working-capital effects. Then review capital expenditures. Strong accounting earnings with weak cash conversion can signal timing or investment needs; strong cash flow supported by a one-time release of working capital may not recur.
Share count and dilution
Per-share P/E incorporates diluted shares through diluted EPS, while a market-capitalization method depends on the share count used in the numerator. Track basic and diluted shares, stock compensation, convertibles, buybacks, and acquisitions. A rising share count can reduce each shareholder’s claim on future earnings even when total net income grows.
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Revenue mix and concentration
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Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Trailing or forward P/E: which should you use?
Use TTM P/E when you want a calculation based on reported results and a transparent denominator. It is the better default for a reproducible comparison because anyone can inspect the four quarterly filings. It can lag rapidly changing conditions, however, especially when earnings are accelerating or falling.
Use forward P/E when the question is explicitly about expected future earnings, but treat it as a scenario rather than a fact. Write down the forecast period, estimate date, GAAP or adjusted basis, and the assumptions behind revenue, margin, taxes, and share count. If Nvidia’s forecast is for fiscal 2028 GAAP EPS and AMD’s is for fiscal 2027 adjusted EPS, the ratios do not measure the same thing.
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A useful presentation can show both TTM and forward P/E in separate columns, with the denominator period and basis in the column headings. Never average the two into one “true” P/E.
A reproducible spreadsheet method
- Set the valuation date. Enter the same closing-price date for Nvidia and AMD. Note the exchange, currency, and whether the price is split-adjusted.
- Build market capitalization. Multiply the closing share price by the chosen diluted or basic share count, or import a market-capitalization figure whose date and share-count convention are disclosed.
- Collect four quarters. From each company’s filings, enter revenue, GAAP net income, diluted EPS, operating cash flow, and capital expenditures for the latest four quarters. Preserve each quarter-end date.
- Sum the denominators. Add the four revenue values for TTM revenue, the four net-income values for TTM net income, and the four operating-cash-flow values for TTM operating cash flow. Subtract the four capital-expenditure values from operating cash flow to obtain TTM free cash flow under your stated convention.
- Calculate P/E. Divide market capitalization by TTM net income, or share price by TTM diluted EPS when the EPS period and share-count treatment align.
- Calculate P/S. Divide market capitalization by TTM revenue.
- Calculate cash-flow ratios. Divide market capitalization by TTM operating cash flow and by TTM free cash flow. If either denominator is negative, explain why the ratio is not useful rather than ranking it.
- Run reasonableness checks. Reconcile per-share and equity-level P/E, check that units are consistent (millions versus billions), and investigate large differences caused by share-count changes, discontinued operations, or non-GAAP adjustments.
- Add operating context. Beside each ratio, record revenue growth, operating margin, cash conversion, capital expenditure, working-capital movement, and relevant segment or regulatory factors.
Common mistakes and how to correct them
- Mixing dates: Correct it by using one closing-price date and displaying the date beside every multiple.
- Calling one quarter “TTM”: Correct it by summing four quarters or labeling the result as quarterly.
- Pairing Nvidia fiscal 2026 with AMD fiscal 2025 without a label: Correct it by naming both fiscal year-end dates or using aligned TTM periods.
- Mixing GAAP and non-GAAP earnings: Correct it by using GAAP for both or documenting identical adjustment rules.
- Using P/S as a profit measure: Correct it by adding margin and cash-flow analysis.
- Ignoring working capital: Correct it by reviewing inventory, receivables, payables, and other operating assets and liabilities in the cash-flow statement.
- Assuming a low multiple means undervaluation: Correct it by testing whether slower growth, lower margins, greater cyclicality, dilution, or business risks explain the discount.
- Extrapolating an unusual growth comparison: Correct it by identifying prior-year charges, one-time benefits, and the starting base before forecasting.
- Relying on stale prices: Correct it by recording the retrieval date and refreshing the market-value numerator whenever the comparison is updated.
How to interpret the finished comparison
Read the three multiples as complementary lenses. P/E asks how much equity value is paid for current earnings. P/S asks how much is paid for sales before expenses. Operating-cash-flow and free-cash-flow multiples ask how much is paid for cash generated after operating activity, and, for free cash flow, after the capital spending you have defined.
Suppose Nvidia’s P/E is higher than AMD’s. That observation alone does not establish overvaluation; the market may be pricing stronger expected growth, higher margins, better cash conversion, or lower perceived risk. Suppose AMD’s P/S is lower. That may reflect a lower margin structure, different revenue mix, more cyclical demand, or skepticism about the durability of growth. If AMD’s cash-flow multiple differs sharply from its P/E, investigate working-capital timing, stock compensation, taxes, capital expenditures, and other reconciliation items before interpreting the gap.
The strongest comparison states the numerator date, denominator period, accounting basis, formula, and key operating context for every ratio. It then explains which assumptions would have to hold for the market’s valuation to make sense, rather than declaring a winner from one number.
What information is still needed for exact current multiples?
An exact current P/E, P/S, or cash-flow multiple requires a synchronized market-price snapshot and fully matched denominators. The figures above provide official financial inputs for specified fiscal periods, but they do not provide a single October 13, 2026 closing-price snapshot paired with completed, matched TTM calculations. Anyone publishing exact current ratios should include the closing-price date, retrieval date, share-count convention, denominator periods, and formulas so readers can reproduce them from issuer filings and market data.
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