Nvidia and AMD Investors Must Be Prepared for Aug. 4

Imagine two big computer-chip companies whose stocks many people own. Something important is about to happen, and if you own their shares (or are thinking about it), you’ll want to understand what’s going on.

Why Aug. 4 Is a Big Deal

• Aug. 4 is a major date for AMD (traded on NASDAQ under the ticker AMD) and Nvidia (traded on NASDAQ under NVDA).
• On that day, AMD reports its second-quarter earnings (this is like a report card showing how much money it made and how its business is doing).
• This report has major implications (big effects) for both AMD and Nvidia stocks.
• After the announcement, the two stocks could move in opposite directions (one might go up while the other goes down).
• Whether you own AMD, Nvidia, or both, each group of investors needs to be prepared.

Important: A single AMD report card can shake up both companies’ stock prices, so don’t be caught off guard!

AMD Needs to Blow Expectations Out of the Water

AMD is the star of its own report, and it has a lot to prove.

• Wall Street analysts (money experts who study companies) expect:
  • 47% revenue growth (meaning it makes 47% more money than a year ago) to $11.3 billion this quarter.
  • That’s up from $10.3 billion in Q1, when it posted 38% growth.
• But just meeting expectations likely won’t be good enough.
• AMD’s stock has been on an absolute tear in 2026:
  • It’s up more than 130% so far.
  • Most of that rise came in the past few months since it reported Q1 earnings.
• Because of that huge rise, people expect AMD to deliver huge revenue and profit growth. If it doesn’t, the stock could slip.

This high hope is shown by AMD’s forward price-to-earnings (P/E) ratio (a simple way to see how expensive a stock is compared to the profit it’s expected to make soon):

• AMD trades for almost 75 times forward earnings.
• That’s a major premium (a very high price tag) for any stock.

For the market to be happy with AMD’s results, it will likely need to:

1. Raise its forecast (tell investors it expects even better results ahead).
2. Blow current quarter expectations out of the water (do much better than expected).
3. Inform investors of GPU shipments to China (say how many graphics chips it’s sending there — that would be a huge boost).
4. Expand its profit margins (keep more money as profit from each sale).

Important: If investors get bad news on any of those four fronts, AMD’s stock could be ripe for a sell-off (lots of people selling, pushing the price down). Most big tech companies in the AI build-out trade for a maximum of about 30 times forward earnings, so AMD is priced very high.

There are a lot of things that need to go right for AMD, making the stock a bit precarious (risky) to invest in right before it reports earnings.

Nvidia Needs Confirmation of Demand

The market is acting a bit oddly:

• AMD is valued at a major premium (75x forward earnings).
• Nvidia trades for a mere 24 times forward earnings — much cheaper.
• Nvidia is valued that low despite growing much faster than AMD.

This trend is expected to last through at least Q2:

• Analysts expect nearly 100% growth from Nvidia during Q2.

So why is Nvidia cheaper? The main worry is:

• What will data center demand look like in the next few years?
  • (A data center is a building full of computers; “demand” means how many big customers want to buy Nvidia’s chips.)

If AMD posts strong results and signals that:

• AI hyperscalers (massive tech companies building AI) are placing even more orders than expected,

then Nvidia stock could skyrocket, because that would be the demand confirmation (proof that customers keep buying) the market has been waiting for.

What Could Happen After the Announcement?

Here’s a simple breakdown of possible outcomes:

• A bad quarter for AMD could sink both stocks (push both prices down).
• An as-expected quarter could sink AMD but leave Nvidia’s stock unaffected.
• Overall, the author thinks Nvidia is the much better value because:
  • It has higher expected growth.
  • It has a much lower valuation than AMD.
• Both companies are worth following, but Nvidia is seen as the only one worth investing in at this time.
• AMD isn’t a bad company, but its stock has gotten far ahead of its actual business.

Should You Buy Nvidia Stock Right Now?

Before you buy Nvidia stock, consider this:

• The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now — and Nvidia wasn’t one of them.
• The 10 stocks that made the cut are built for long-term growth and could produce big returns.
• For example:
  • Netflix made the list on Dec 17, 2004 — $1,000 invested then would be $397,351.
  • Nvidia made the list on April 15, 2005 — $1,000 invested then would be $1,304,257.
• Stock Advisor has a track record of beating the S&P 500 by 4x.

Stock Advisor returns as of July 17, 2026.

The article was written by Keithen Drury, who has positions in Nvidia. The Motley Fool has positions in and recommends both AMD and Nvidia and has a disclosure policy.

Summary

• Aug. 4 is when AMD reports Q2 earnings, and it matters for both AMD and Nvidia investors.
• AMD must smash expectations, raise forecasts, confirm China GPU shipments, and grow profit margins — or its pricey stock could drop.
• Nvidia is cheaper and growing faster, but needs proof that big AI customers keep ordering.
• A bad AMD report could hurt both; a so-so one mainly hurts AMD.
• The author favors Nvidia over AMD for investing right now, though both are worth watching.

FAQ

Q: What does “forward P/E ratio” mean in simple terms?
A: It’s a number showing how much investors are paying for a stock compared to the profit the company is expected to make in the near future. A higher number means a pricier stock.

Q: Why might AMD and Nvidia stocks move in opposite directions?
A: AMD’s report could show different signals about the chip market. Strong AMD results may prove AI demand is high (good for Nvidia), while AMD’s own high-priced stock could fall if it disappoints.

Q: What is an “AI hyperscaler”?
A: A very large tech company that builds massive AI computer systems and buys lots of chips from companies like Nvidia and AMD.

Q: Is AMD a bad company?
A: No. The article says AMD isn’t bad at all, but its stock price may have risen faster than its business results justify.

Q: Does the article say I should definitely buy Nvidia?
A: It says Nvidia looks like the better value and may be worth investing in now, but also notes Motley Fool’s Stock Advisor list of 10 best stocks didn’t include Nvidia, so do your own research.