AMD's 126% rally faces Nvidia earnings test on Aug. 26

AMD shares have climbed 126 percent in 2026, outpacing Nvidia's 18 percent gain, but Nvidia's quarterly earnings on Aug. 26 could flip that lead. Intel has surged 162 percent this year, the strongest of the three chipmakers.

"Demand remains strong with much of Nvidia's capacity sold out for the next 12-plus months," the BMO Capital analyst said in a research note initiating coverage with an Outperform rating and a $340 price target. RBC Capital's Srini Pajjuri maintained an Outperform rating and $300 target ahead of the results, citing the generative AI inflection, the best access to supply in the industry and initial ramps of the Rubin platform with a 50 percent or more average sales price premium.

Nvidia guided Q2 FY2027 revenue of $91 billion at the midpoint, versus the $91.9 billion Wall Street consensus, implying revenue nearly doubling from $46.7 billion a year earlier. The company guided gross margin of 74.9 percent (GAAP) and 75 percent (non-GAAP), though sequential growth slows to 11 percent. AMD trades at 119.7 times trailing earnings versus Nvidia's 33.3 times, with data center revenue up 107 percent year over year to $6.72 billion in Q2, or 58 percent of sales.

A strong Nvidia report could trigger a selloff in AMD shares and reshape semiconductor leadership. Nvidia's average one-year price target of $303 implies 38 percent upside from its current price near $220, while AMD's $613 target implies 27 percent and Intel's $115 implies 19 percent.

Valuation gap widens as AMD trades at 120 times earnings

AMD's premium valuation has magnified downside moves. The stock closed at $466.42 on Aug. 19, down 3.71 percent, after the company projected its 2026 AI racks would be four times more energy-efficient than its 2024 platform. Nvidia closed at $217.56 with a market value of $5.26 trillion, versus AMD's $761.4 billion and Intel's $487.6 billion.

The sector has faced pressure from rising Treasury yields, with the 30-year yield at 5.33 percent, a 19-year high, after Nvidia shed up to $153 billion in market value in a single session. Wall Street's 41 analysts covering Nvidia carry an average target of $264.97, with 39 Buy ratings, one Hold and one Sell. AMD's data center segment, which accounts for 58 percent of revenue, posted operating income of $2.1 billion, equal to a 31 percent margin, as CEO Lisa Su guided for server revenue growth exceeding 80 percent in the second half.

Intel, the laggard of the trio by valuation, trades at $97 with a target of $115, though 32 of 48 analysts recommend a hold, reflecting doubts about its revival. For AMD investors, the Aug. 26 print is the clearest near-term catalyst: a beat that lifts Nvidia's multiple could compress AMD's 120-times valuation, while a miss would support the premium the market has assigned to its data center growth.

This article is for informational purposes only and does not constitute investment advice.