By Habib Ur Rehman
Publication Date: 2026-10-17 22:11:00
What separates earnings resilience between NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD)? Both sell AI compute, but a dollar of lost margin has a very different effect on their current profits. The stocks rank first and fifth in our 10 Best AI Infrastructure Stocks to Buy for the Long Term, respectively. See which other stocks made the list.
The same margin shock produces different damage
Nvidia reported $96.22 billion of quarterly revenue and $63.73 billion of GAAP operating income on August 26, a 66.2% operating margin. AMD’s August 4 results showed $11.54 billion of revenue and $1.99 billion of GAAP operating income, a 17.3% margin. These are company-wide figures, covering their respective latest reported quarters.
Hold revenue constant and subtract five percentage points from each margin. Nvidia’s operating income falls 7.5%; AMD’s falls 29.0%. This illustrative stress isolates the starting profit cushion. Actual revenue, research spending and product mix would also change in a downturn. Nvidia has considerably more room to absorb pricing pressure before its operating earnings contract severely.
AMD’s opportunity is the reverse: scaling a smaller profit base can produce faster earnings growth. Its data-center revenue reached $6.7 billion, up 107%, while Nvidia’s reached $89 billion. The challenger can gain from…
