Advanced Micro Devices (NASDAQ:AMD | AMD Price Prediction) stock is having a pretty easy time outperforming Nvidia (NASDAQ:NVDA) so far this year, with an impressive 95% gain year to date versus just 31% for NVDA stock. Indeed, the cousin rivalry between the top bosses of the two companies (Lisa Su over at AMD and Jensen Huang at Nvidia) in AI chips could intensify going into the new year.
While calling for AMD to outperform NVDA at the start of the year felt so obvious, it certainly wasn’t the case way back in December 2024, when AMD stock was getting slapped with downgrades while analysts only hiked the price targets of NVDA. Additionally, NVDA stock still seemed much cheaper than AMD when comparing the price-to-earnings (P/E) multiples side-by-side.
AMD is beating NVDA this year. But what about in 2026?
In any case, it was wise to just go against the herd because the crowd was way too pessimistic over Lisa Su’s empire and her firm’s ability to do well without having to top Nvidia’s latest and greatest AI chips in terms of pound-for-pound performance. In any case, AMD is the new hot horse to bet on, and I think the outperformance versus NVDA could continue, as Lisa Su and company prove to Wall Street what they’re really capable of.
Since the near doubling in shares in 2025, analysts have warmed up to the AI chip innovator in a big way. As it turned out, AI demand has really helped lift the AMD boat higher in the face of lower expectations. With strong margins and even stronger demand for its latest arsenal of AI chips, it certainly feels like AMD has a shot at catching up.
The MI400 line of chips looks impressive and could help fuel outsized growth in the second half of 2026. Additionally, with a big vote of confidence given by the folks over at JPMorgan last week, who see AMD as having more sales upside amid the AI boom, I think it’s worth staying aboard AMD stock as it soars higher.
With OpenAI teaming up with AMD, I’d argue that much of the upside of the growing relationship may not have fully worked its way into AMD’s share price. Indeed, OpenAI doesn’t appear to be staying loyal to one GPU maker, and that could prove a massive win for AMD, especially as most other AI firms look to do business with both AI innovators.
Could the MI450 chip really narrow the gap with Nvidia?
It seems quite outlandish to think that a new year and a new chip could help AMD catch up. However, at this rate, I wouldn’t be as surprised, especially given AMD’s pace of advancement. A big-name analyst named Frank Lee over at HSBC thinks the AMD MI450 chip could be competitive with Nvidia’s 2026 lineup. I think Mr. Lee is right, especially now that OpenAI is poised to spend a great deal on its GPUs.
Personally, I think AMD’s involvement in circular financing with AI firms is a massive win and a booster as Lisa Su and company look to catch up in an AI race that’s bound to take an interesting turn going into the new year. My money is on AMD over Nvidia for 2026, given the promise of the MI400 lineup and the latest AMD-OpenAI deal that could make AMD a not-so-distant number-two player in AI chips.
Also, let’s not forget about Oracle (NYSE:ORCL), which has been deploying tens of thousands of AMD AI chips. The AI heavyweights are buying, and that’s a good sign for AMD as it continues to floor it with the hopes of moving closer to that top spot in the AI race.
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