AMD vs Nvidia: Profit And Margin Comparison

Computer chips. Pexels Images.

This article compares the profitability and profit margins of Advanced Micro Devices (AMD) and Nvidia Corporation.

We will delve into various metrics, including gross profit, operating profit, pre-tax profit, and net profit, to provide a comprehensive understanding of each company’s financial performance.

Let’s look at the numbers!

For other key statistics of AMD and Nvidia, you may find more resources on these pages:

Revenue

• AMD revenue streams: data center, gaming, embedded, etc.,
• AMD revenue by region: U.S., Japan, China, Europe, Taiwan, etc.,
• Nvidia data center revenue: compute & networking,
• Nvidia revenue segments and profit margin breakdown,

Profit Margin

• AMD profit margin breakdown: data center, gaming, client, etc.,
• AMD vs Intel: profit margin comparison,
• Nvidia vs Palantir: profit margin analysis

R&D Cost

• AMD vs Nvidia: R&D spending,
• Nvidia vs Palantir: R&D budget,
• AMD vs Intel: research dnd development cost

Debt

• Nvidia financial health: debt level, payment due, and liquidity,
• AMD financial health: debt level, payment due, and liquidity

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Definitions

To help readers understand the content better, the following terms and glossaries have been provided.

Gross Profit: Gross profit is the amount a company earns after subtracting the costs associated with producing and selling its products or providing its services. It’s a key indicator of a company’s financial health and efficiency in managing production costs.

Here’s the formula:

\[\text{Gross Profit} = \text{Revenue – Cost of Goods Sold (COGS)} \]

Gross profit helps to measure a company’s ability to generate profit from its core business operations, excluding indirect costs like administration and marketing expenses.

Operating Profit: Operating profit, also known as operating income or operating earnings, represents the profit a company makes from its core business operations, excluding any income from investments, interest, and taxes.

It’s a crucial measure of a company’s operational efficiency and profitability. Here’s the formula for calculating operating profit:

\[\text{Operating Profit} = \text{Gross Profit – Operating Expenses} \]

Operating expenses include costs such as salaries, rent, utilities, and depreciation. Operating profit provides insight into how well a company is managing its core business activities and controlling its operating costs.

Pre-Tax Profit: Pre-tax profit, also known as pre-tax income or earnings before tax (EBT), represents the profit a company makes before accounting for income taxes.

It’s a measure of a company’s profitability that excludes tax expenses, providing insight into the company’s financial performance before tax obligations are considered.

Here’s the formula for calculating pre-tax profit:

\[\text{Pre-tax Profit} = \text{Operating Profit + Other Income – Other Expenses} \]

Other income may include items like interest earnings, and other expenses might include interest expenses or non-operating costs.

Net Profit: Net profit, also known as net income or net earnings, is the amount of profit a company has left after all expenses have been deducted from total revenue.

These expenses include the cost of goods sold (COGS), operating expenses, interest, taxes, and any other expenses. Net profit is a key indicator of a company’s overall profitability.

Here’s the formula for calculating net profit:

\[\text{Net Profit} = \text{Total Revenue – Total Expenses} \]

Net profit provides a clear picture of a company’s financial health, showing how much profit it actually retains after covering all its costs. It’s often used by investors and analysts to assess a company’s performance and profitability.

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Who Generates Higher Profit And Has Better Margins?

Nvidia generates significantly more profit and has better margins compared to AMD. For instance, in fiscal year 2024, Nvidia’s net income soared to $73 billion with a net profit margin of 56%, while AMD’s net income was only $1.6 billion with a net profit margin of 6%. Nvidia’s gross margin is also higher at 75% compared to AMD’s 49%.

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Insight & Summary of AMD and Intel’s Profitability and Margins Comparison

The following analysis consolidates the trends observed for AMD and Nvidia’s profit margin comparison for the 2019–2025 period.

• AMD delivered steady gross margin expansion toward ~50% by 2025, but operating and net margins remained modest, generally in the single to low double digits. Profitability was volatile, with sharp declines in 2022–2023 before recovering to $4.3 billion net profit in 2025, reflecting resilience but limited scale compared to peers.

• Nvidia, by contrast, demonstrated extraordinary growth and margin strength. Gross margins consistently exceeded 60%, while operating margins surged past 60% in 2024–2025. Net profit expanded from under $3 billion in 2019 to $120 billion in 2025, underscoring unmatched scale and efficiency.

• The comparative insight is clear: AMD has matured into a consistently profitable competitor with improving margins, while Nvidia has established dominance through scale-driven profitability and superior operating leverage.

• In essence, AMD represents a disciplined growth story, whereas Nvidia exemplifies market leadership and structural advantage in high-performance computing and AI infrastructure.

The table below combines all key profitability metrics into a single view for the latest three fiscal years.

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AMD vs Nvidia: Gross, Operating, Pre-Tax, and Net Profit

You can find the definitions of all profitability metrics here: gross profit, operating profit, pre-tax profit, and net profit.

The graph above clearly illustrates that Nvidia’s profitability significantly surpasses that of AMD in all fiscal years. Nvidia consistently achieves higher gross and operating profits, reflecting its superior financial performance and efficiency in generating income compared to AMD.

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AMD Vs Nvidia: Gross, Operating, Pre-Tax, and Net Profit Margins

You can find the definitions of all profitability metrics here: gross profit, operating profit, pre-tax profit, and net profit.

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References and Credits

1. All financial figures presented were obtained and referenced from AMD’s and Nvidia’s annual and quarterly reports published in the respective company’s investors relation page: AMD Financial Reports and Nvidia Financial Reports.

2. Pexels Images.

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Disclosure

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