Underwood and Daughtry's band Daughtry and each received two 2008 AMA nominations while Sparks received one.
Underwood's album "Carnival Ride," which debuted at No. 1 in October 2007 and has sold more than 2.3 million copies since, will compete for Favorite Country Album -- the same award it won last year.
"Carnival Ride" will compete with Garth Brooks' "The Ultimate Hits" and Rascal Flatts' "Still Feels Good" for this year's award. It beat Tim McGraw's "Let It Go" and Rascal Flatts' "Me and My Gang" for last year's award.
Underwood will also look to repeat as the AMA's Favorite Female Country Artist, where she is pitted against Reba McEntire and Taylor Swift. She competed against Swift and Martina McBride last year.
Like Underwood, Daughtry will also be competing for an award it already won last year: Favorite Adult Contemporary Artist. Daughtry -- which was nominated alongside Norah Jones and John Mayer last year -- will compete against Sparks and The Eagles for this year's award.
Daughtry is also nominated for Favorite Pop or Rock Music Band, Duo, or Group against Coldplay and The Eagles.
Underwood is no stranger to AMA honors. After winning Favorite New Breakthrough Artist in 2006, she went 3-for-3 and won the Favorite Country Female Artist, Favorite Country Album and T-Mobile Text-in Award for Favorite Artist awards at last year's ceremony.
Despite being a newcomer, Daughtry also went 3-for-3 at last year's awards. The group took home AMA honors for Favorite Adult Contemporary Artist and Favorite Breakthrough Artist as well as Favorite Pop or Rock Album for their self-titled debut album.
The 2008 American Music Awards ceremony will air live on Sunday, November 23 at 8PM ET/PT on ABC from Los Angeles' Nokia Theatre. Like last year, the winners will be determined by online voting conducted via ABC's website. Fans votes will be collected until November 7.