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Advanced Micro Devices (Nasdaq: AMD) has quietly been outshining Nvidia (Nasdaq: NVDA) for more than a year now, doubling its value since the end of Q2 2025 and soaring more than 15% in January 2026 alone. 

At less than one-tenth of Nvidia’s seismic $4.5 trillion market capitalization, it’s clear that AMD has plenty of room for growth, but can it continue to outshine one of the world’s most valuable stocks? 

AMD’s performance of late has comfortably shrugged off mixed investor sentiment throughout the S&P 500, underlining its capabilities as a stock with significant potential: 
 

Strength in Innovation

One catalyst for AMD’s recent surge has been the announcement of its highly anticipated Ryzen 7 9850X3D desktop gaming CPU, which is due to launch in the coming days at a suggested retail price of $499. 

Following a December leak with a mooted $550 price point, the more competitive price has been welcomed by investors. 

However, it’s been AMD’s relationship with artificial intelligence that’s drawn the most growth on Wall Street in recent years. 

AMD launched a strong defense of its Ryzen AI 400 series processors, following suggestions that Intel’s Panther Lake CPUs may be technically more advanced. 

According to AMD’s ‘recommending positioning,’ the Ryzen processors outperform their counterparts on CPU performance, while metrics surrounding AI performance match Intel’s latest release step for step, thanks to the internal NPU (Neural Processing Unit) supporting the Ryzen AI 400 series. 
 

Higher Pricing Power

Critically, AMD is already close to being sold out of its server CPUs for the year. Because of such a significantly growing appetite for the Santa Clara company’s chips, KeyBanc analyst John Vinh has suggested that a price hike of around 10% to 15% could be on the way in a move that could play a major role in raising the company’s bottom line. 

It’s this quickening server chip momentum that prompted Bernstein analyst Stacy Rasgon to lift his estimates for AMD’s fourth-quarter revenue ahead of its upcoming earnings report. Additionally, Bernstein is modeling for AMD’s Epyc processor sales to grow 30% in 2026. 

Despite Nvidia’s stranglehold on the global AI GPU market, in which the semiconductor leader holds more than a 90% share, the sheer gulf in size between the two companies means that AMD can still grow exponentially by gaining a higher market percentage.

There’s evidence of this happening already, with AMD announcing a flurry of major partnerships with hyperscalers and AI companies like OpenAI and Oracle to receive its MI450 series GPUs. This can help the firm to broaden its revenue streams in a sustainable way and continue supporting its scaling ambitions moving forward.
 

Opportunities as a Low-Cost Alternative

Looking to the future, AMD appears to be gaining momentum as a formidable threat to Nvidia’s dominance because it has the potential to position itself as a cost-effective alternative to the industry’s AI chip market leader. 

We can see this strategy in action already with the MI355X accelerator, which was deployed by AMD as a low-cost rival to Nvidia’s components. The accelerator’s superior performance-per-dollar advantages allowed AMD to capture a far greater share in inference workloads that depend on efficiency as well as training capacity. 

However, this hasn’t meant that AMD’s product quality has diminished. The stock’s rise in 2025 was characterized by the firm’s ability to challenge resource-rich rivals when it comes to high-performance computing. 

AMD’s ability to act as a budget-friendly semiconductor firm is already paying off, according to 2025 data. 

The firm’s data center segment, which now forms its core growth engine, delivered record revenue throughout the past year, posting $4.3 billion in revenue during the third quarter. This represents growth of 22% on a year-over-year basis that has been supplemented by intensified demand for 5th Gen EPYC processors and Instinct accelerators. 

Given that AMD has been able to sell its products so freely already in 2026, it suggests that there’s room for price hikes in the future without negatively impacting the firm’s reputation as a low-cost competitor to Nvidia. 

If AMD can continue to win over budget-focused firms seeking to boost their AI adoption in 2026, it could continue to outpace NVDA for growth on Wall Street. 
 

Looking Ahead

2026 is set to be a pivotal year for AMD as more firms look to level up their AI adoption, as the sector continues to evolve from the ‘tell me’ to ‘show me’ phase of implementation. 

As reality kicks into gear, budget-conscious adopters are increasingly likely to identify AMD as a means of achieving their AI goals. 

Although Nvidia is set to remain a dominant market leader, AMD’s far lower market capitalization suggests greater room for growth, making it a stock to track over the year ahead as the AI boom continues to attract key players from many different sectors.

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