AMD has fallen short of the market’s hopes for its AI business, as Nvidia continues to dominate. There is little sign of that changing, according to Jefferies.

Shockingly, based on the trailing price-to-earnings multiple for both companies, AMD's shares are far more expensive. The stock has a P/E of 106, while Nvidia's is much lower at 40. So not only is Nvidia the dominant AI processor company, but its shares are also relatively cheaper, easily making Nvidia the better AI stock to own in this matchup.

Advanced Micro Devices shares lost ground Thursday as Jefferies analysts downgraded the stock, saying they expect the performance gap between AMD's latest products and Nvidia's to widen.