(Bloomberg/Ryan Vlastelica) — 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.
AMD is the top-performing chipmaker, with shares up around 45% 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 33%. AMD’s outperformance of its much larger rival suggests high expectations from semiconductor investors at a time when they’ve been hard to impress.
“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.”
Shares of AMD slipped 0.8% on Tuesday.
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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.
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.
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.
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.
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.
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.
“The strong AI capex trends will continue to support profit growth in the tech sector,” she wrote in a note published on July 31. “Semiconductors should remain the fastest-growing segment.”
Nvidia is projected to report second-quarter revenue growth of 53%, twice AMD’s pace, when it gives results on Aug. 27. And yet Nvidia shares trade at roughly the same valuation, around 35 times earnings expected over the next 12 months.
The difficulty of competing with Nvidia is a key reason why Wall Street tends to be more skeptical about AMD’s prospects. Fewer than 70% of the analysts tracked by Bloomberg recommend buying the shares — compared with nearly 90% for Nvidia. With AMD’s shares trading 15% above the average price target, the company has the worst return potential in the Philadelphia semiconductor index, based on analyst projections.
Randy Hare, director of equity strategy at Huntington National Bank, still favors Nvidia over AMD given its superior growth. But he said both can continue to outperform the broader market.
“Investors are realizing the pond is big enough for more than one fish,” Hare said.
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Palantir Technologies Inc. reported a 48% increase in revenue for the second quarter to more than $1 billion, citing the “astonishing impact” of artificial intelligence technology on its business.
Taiwan Semiconductor Manufacturing Co. has discovered a possible leak of trade secrets related to its advanced chipmaking techniques, and has taken action against staff deemed responsible.
SoftBank Group Corp. is building up stakes in Nvidia Corp. and Taiwan Semiconductor Manufacturing Co., the latest reflection of Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence.
German auto chipmaker Infineon Technologies AG expects flat sales in the current fiscal quarter, as uncertainties about tariffs continue to weigh on revenue.
Earnings Due Tuesday
Earnings Premarket:
Axcelis Technologies Inc. (ACLS US)
Azenta Inc. (AZTA US)
Fox Corp. (FOXA US)
Gartner Inc. (IT US)
IPG Photonics Corp. (IPGP US)
Leidos Holdings Inc. (LDOS US)
Novanta Inc. (NOVT US)
Silicon Laboratories Inc. (SLAB US)
Earnings Postmarket:
Cirrus Logic Inc. (CRUS US)
A10 Networks Inc. (ATEN US)
Adeia Inc. (ADEA US)
Advanced Energy Industries Inc. (AEIS US)
Advanced Micro Devices Inc. (AMD US)
Angi Inc. (ANGI US)
Arista Networks Inc. (ANET US)
Atomera Inc. (ATOM US)
BlackLine Inc. (BL US)
Digital Turbine Inc. (APPS US)
DoubleVerify Holdings Inc. (DV US)
Match Group Inc. (MTCH US)
News Corp. (NWSA US)
OneSpan Inc. (OSPN US)
Qualys Inc. (QLYS US)
RingCentral Inc. (RNG US)
Skyworks Solutions Inc. (SWKS US)
Super Micro Computer Inc. (SMCI US)
Teradata Corp. (TDC US)
Viasat Inc. (VSAT US)
–With assistance from Subrat Patnaik, David Watkins and Cristin Flanagan.
(Updates to market open.)
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