Should You Pick NVIDIA Stock Over Its Competitors?
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Investors pay less for each dollar of NVIDIA (NVDA) earnings than they do for AMD’s, Broadcom’s or Marvell Technology’s, even though NVIDIA grows the fastest and maintains the widest operating margin in its peer group. The stock price appears to assume that this growth will cool. Buyers picking NVIDIA are betting that sales will keep climbing as the company ships its Vera Rubin systems, and that margins will hold up as memory prices rise. So is NVIDIA’s growth starting to fade?
NVIDIA Outpaces AMD, And Its Growth Keeps Speeding Up
No. Management said on the August 26, 2026 call that growth had sped up for the fourth quarter in a row. Fiscal Q2 2027 revenue reached $96.2 billion, up 105.9% from a year earlier.
AMD illustrates just how unusual NVIDIA’s price is. Over their latest four fiscal quarters, NVIDIA’s revenue grew 83.4%, compared with 39.5% at AMD. NVIDIA kept 65.2% of its sales as operating profit, while AMD kept 15.7%. Yet investors pay 27.1 times earnings for NVIDIA and 135.6 times for AMD, a P/E ratio so high that AMD’s earnings look small next to its share price. Buyers have still favored AMD: its shares rose 129.4% over the past year, against 18.4% for NVIDIA.
Qualcomm is the only peer with a lower P/E, at 20.1 times earnings, but its revenue grew 1.9% over its latest four fiscal quarters.
| NVDA | AMD | AVGO | QCOM | MRVL | |
|---|---|---|---|---|---|
| Four Fiscal Quarters | ended 2026-07-26 (Q3 FY2026 to Q2 FY2027) | ended 2026-06-27 (Q3 FY2025 to Q2 FY2026) | ended 2026-08-02 (Q4 FY2025 to Q3 FY2026) | ended 2026-06-28 (Q4 FY2025 to Q3 FY2026) | ended 2026-08-01 (Q3 FY2026 to Q2 FY2027) |
| Market Value (USD billion) | 5236 | 873 | 1594 | 186 | 216 |
| P/E | 27.1 | 135.6 | 41.6 | 20.1 (not in the P/E rank) | 81.7 |
| Revenue Growth | 83.4% | 39.5% | 48.7% | 1.9% | 30.6% |
| Operating Margin | 65.2% | 15.7% | 48.5% | 23.3% | 16.8% |
| Share Price Change, 2025-10-17 to 2026-10-20 | 18.4% | 129.4% | -3.6% | 9.7% | 173.8% |
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Management Expects NVIDIA’s Margins To Dip
NVIDIA’s gross margin has held up so far, but management expects it to slip. Data centers account for almost all of NVIDIA’s sales, bringing in $89 billion of that $96.2 billion fiscal Q2 2027 revenue. The company began production shipments of Vera Rubin in August. According to management, the revenue NVIDIA can hope to earn from each gigawatt of data center capacity has risen to about $40 billion with Vera Rubin, up from $25 billion with Blackwell.
NVIDIA reported a 75.0% gross margin in fiscal Q2 2027. For fiscal Q3, management forecasts a gross margin of 74%, plus or minus 0.5 points. The company expects margins to bottom at 71% to 72% in fiscal Q4 before settling at 72% to 73% in fiscal 2028. Management said memory prices had risen more than it expected, and it reset its margin expectations as a result.
How Much Of NVIDIA’s Profit Came In As Cash?
About 40% in fiscal Q2 2027, and the P/E counts profit, not cash. NVIDIA posted $59.7 billion in net income that quarter, against $24.1 billion of cash from operations. Management said days of sales outstanding, a measure of how long customers take to pay, rose to 60 days, reflecting longer payment terms for some large buyers. Inventory climbed to $32 billion as NVIDIA prepared for the Vera Rubin launch.
Management forecasts fiscal Q3 2027 revenue of $108 billion, plus or minus 2%, coming in about 12% above fiscal Q2. The company also expects revenue to grow about 70% in fiscal 2028, and says that outlook is limited by supply, not demand. If growth slowed or margins kept sliding, NVIDIA’s earnings would rise more slowly, and its lower P/E than AMD’s, Broadcom’s or Marvell Technology’s would count for less.
Investors who pick NVIDIA over its rivals are counting on the company to keep growing faster than all of them while memory costs more. This growth has kept speeding up so far. The company’s gross margin is less certain, since management expects it to fall for the next two quarters. Gross margin is the figure to watch in NVIDIA’s fiscal Q3 2027 report, expected on or around November 17, 2026.
Is Too Much Of Your Wealth Riding On One Stock?
NVIDIA is one stock among several rivals a holder could own instead. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.
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