AMD Beats NVDA in 1H26 Returns. Here’s What's Next for 2H26.

Advanced Micro Devices (AMD) has been one of the top performers in the S&P 500 ($SPX) during the first half of 2026. Specifically, AMD stock has surged 142% year-to-date (YTD), outperforming Nvidia (NVDA) stock's gain of just over 4% over the same period.

The rally has been driven by AMD's solid financial performance over the past several quarters, led by its growing share in the artificial intelligence (AI) infrastructure space. Demand for its Instinct GPU accelerators remains solid, driven by a diversified customer base and ongoing AI infrastructure spending.

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AMD is also likely to benefit from strong demand for its high-performance EPYC processors as AI workloads evolve from model training to inference and emerging agentic AI applications. These workloads require greater compute capacity, positioning AMD to capitalize on growth across both GPUs and CPUs.

While these tailwinds indicate strong growth ahead, AMD stock is not cheap. Following its sharp run-up, AMD now trades at 87.9 times forward earnings, a substantial premium to Nvidia's forward price-to-earnings (P/E) ratio of about 22.7 times.

With this backdrop, here's what investors can expect next for AMD stock.

AMD's Growth Isn't Slowing Down

AMD's valuation appears high, but the company's solid execution over the past several quarters and long-term growth prospects suggest that the higher multiple is warranted. The company continues to gain share in AI accelerators while its CPU business has significant room to expand. On top of that, AMD projects robust growth over the next three to five years, which could drive earnings high enough to support its current valuation.

AMD's latest quarterly results were solid, with revenue climbing 38% year-over-year (YOY) to $10.3 billion. At the same time, AMD's earnings increased by more than 40% YOY. Strong profitability also translated into a sharp improvement in cash generation, with free cash flow more than tripling from the prior year.