Nvidia versus AMD: Who’s Leading the AI Chip Race?

TLDR

• Nvidia reported revenue of $215.9 billion for fiscal year 2026, marking a 65% increase compared to the previous year.
• For the full fiscal year, Nvidia’s Data Center revenue reached $193.7 billion.
• AMD’s total revenue for fiscal year 2025 was $34.6 billion, with its Data Center segment growing 32% to $16.6 billion.
• Nvidia’s Data Center revenue significantly surpasses AMD’s, being more than 11 times larger.
• AMD incurred charges totaling $440 million due to U.S. export restrictions affecting its MI308 GPU products.

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(SeaPRwire) –   While both Nvidia and AMD are key players in the artificial intelligence chip market, their financial figures reveal distinct business scales and operational stages.

Nvidia announced a revenue of $215.9 billion for fiscal year 2026, representing a 65% year-over-year growth. The company achieved a gross margin of 71.1%. In the fourth quarter alone, Nvidia generated $68.1 billion in revenue, with its Data Center segment contributing $62.3 billion within that single quarter.

NVIDIA Corporation, NVDA

Over the entire fiscal year, Nvidia’s Data Center business recorded $193.7 billion in revenue. This segment has become the company’s primary focus, largely driven by the demand for AI infrastructure from major cloud and technology providers.

Nvidia’s offerings extend beyond just chips; they provide a comprehensive solution including accelerators, networking hardware, systems, and a software platform that customers utilize for their AI workloads. This integrated approach makes it challenging for clients to transition to competing solutions.

A primary concern for Nvidia is its business concentration. With a substantial portion of its revenue tied to the spending cycles of large data centers, any deceleration in this spending could significantly impact its financial performance.

AMD also reported robust results for its fiscal year 2025, with total revenue reaching $34.6 billion. The company’s Data Center segment generated $16.6 billion for the year, a 32% increase from 2024. This growth was propelled by its EPYC server processors and Instinct AI accelerator products.

AMD’s Challenge

AMD’s fourth quarter results included a 54% gross margin, $1.8 billion in operating income, and $1.5 billion in net income. While these figures are strong, the disparity in scale compared to Nvidia remains considerable.

Advanced Micro Devices, Inc., AMD

Nvidia’s annual Data Center revenue is over 11 times that of AMD’s, highlighting AMD’s early stage in developing its AI infrastructure business.

AMD does not necessarily need to surpass Nvidia to be a valuable investment. Capturing even a modest share of the server and accelerator market could lead to significant improvements in its financial metrics.

However, AMD faces notable obstacles. In fiscal year 2025, the company recorded approximately $440 million in charges related to U.S. export controls on its MI308 data-center GPU. This indicates policy-related risks in addition to the competitive challenge of gaining market share from Nvidia.

What Analysts Think

Analysts generally hold a positive outlook on both companies, with a stronger sentiment towards Nvidia. According to MarketBeat, 54 analysts cover Nvidia, with a consensus rating of Buy, comprising 48 Buy ratings, 4 Strong Buy ratings, and 2 Hold ratings. The average 12-month price target is $275.25.

AMD is covered by 40 analysts, who have issued a Moderate Buy consensus, including 1 Strong Buy, 31 Buy ratings, and 8 Hold ratings. Its average price target stands at $296.44.

The more favorable consensus for Nvidia is attributed to its leading market position and higher profit margins. The more reserved outlook for AMD reflects concerns about its valuation and the pace at which it can narrow the competitive gap.

AMD’s average price target of $296.44 is currently higher than Nvidia’s $275.25, suggesting that analysts anticipate greater price appreciation potential for AMD from its current level, despite Nvidia’s stronger fundamental business performance.