AMD Under Pressure to Show AI Gains With Stock Beating Nvidia

ma{g5qf6p(cc1)l4)pp6}a8a_media_dl_1.png Bloomberg

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(Bloomberg) — Advanced Micro Devices Inc. earnings are expected to show the chipmaker is increasingly benefiting from the artificial intelligence arms race. The question is whether it’s enough to justify a rally that has outpaced Nvidia Corp.’s performance this year.

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AMD is the top-performing chipmaker, with shares up 46% in 2025, as companies spend increasing amounts on AI computing gear. Nvidia, which dominates the market for accelerators used to run and develop AI services, has gained 34%. AMD’s outperformance of its much larger rival suggests high expectations from semiconductor investors at a time when they’ve been hard to impress.

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“The thing that will keep the momentum going at AMD is for us to see how it is positioned in the AI infrastructure,” said Matt Wittmer, portfolio manager at Allspring Global Investments. “The stock has had a nice run, and estimates could have gotten ahead of themselves, but over the long-term it can benefit as the overall AI pie gets bigger.”

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Chip stocks have been winners this year as the race to expand AI computing capabilities accelerates. The Philadelphia Stock Exchange Semiconductor Index is up 13%, beating the Nasdaq 100 Index’s 10% gain. In the past two weeks, Meta Platforms Inc., Microsoft Corp., Amazon.com Inc., and Alphabet Inc. outlined aggressive plans to pump more than $340 billion combined into capital spending this year, with much of it flowing to computing gear.

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Nvidia has a roughly 95% share of revenue from graphics processing units, which excel in AI computing, according to Bloomberg Intelligence estimates. While AMD is advancing, the chipmaker accounts for just 5% of the market, analysts Kunjan Sobhani and Oscar Hernandez Tejada said.

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AMD is expected to post revenue of $7.4 billion when it reports second-quarter results on Tuesday afternoon, according to the average of analyst estimates compiled by Bloomberg, a 27% increase from a year ago.

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But simply meeting Wall Street estimates likely won’t be enough to satisfy investors. Arm Holdings Plc suffered its biggest drop in a year last week despite forecasting revenue in the current quarter that was in line with the average analyst estimate. The same thing happened to Qualcomm Inc., whose shares dropped 7.7% the day after it reported a quarterly sales forecast range that topped the midpoint of estimates.

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In addition to artificial intelligence spending, AMD is benefiting from market share gains in central processing units at the expense of Intel Corp., which is struggling to regain its technological leadership. AMD is also set for a boost after saying it plans to resume sales of some AI chips in China with the US government’s approval. 

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But while that removed what had been an overhang on AMD’s shares, the big focus remains on the AI opportunity. Global AI spending is on pace to hit $500 billion in 2026, up nearly a third from this year, according to Ulrike Hoffmann-Burchardi, chief investment officer of the Americas and global head of equities at UBS Financial Services.