Could AMD Dethrone Nvidia?
Key Points
AMD has been impressing investors with a string of good news.
Nvidia still controls approximately 80% of the AI accelerator market.
Yet, shares of AMD have surged over 150% in 2026 vs. just 12% for Nvidia.
If the past few years have taught investors anything, it's that you shouldn't bet against Nvidia (NASDAQ: NVDA). Still, Advanced Micro Devices (NASDAQ: AMD) is creating quite a buzz with a string of wins and advances that pose a direct challenge to the dominance of its rival Nvidia. Can AMD actually dethrone Nvidia as king of AI chips?
There are a lot of good things happening with AMD. The company is reportedly finalizing a deal with Anthropic to supply 2 gigawatts of AI computing capacity. AMD may also take an equity stake in Anthropic worth up to $5 billion.
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Microsoft's Azure has also committed to using AMD's new Helios rack-scale platform. This pairs well with AMD's existing partnerships with OpenAI and Meta Platforms. Lastly, the autonomous driving company Turing is migrating 10% of its AI training workloads from Nvidia to AMD.
Image source: The Motley Fool.
AMD's new accelerators could potentially exceed Nvidia's performance in certain workloads by the end of the year.
While AMD is closing the gap in many ways, it still has a tremendous way to go before overtaking Nvidia. Jensen Huang's company still controls upwards of 80% of the AI accelerator market, while AMD's revenue accounts for between 5% and 7%. AMD isn't anywhere close to catching Nvidia's data center revenue, either. Nvidia reported $75 billion in data center revenue in the last quarter alone.
For investors, it's important to note that AMD doesn't need to "dethrone" Nvidia to see meaningful growth in both revenue and market share. It's estimated that the total addressable market for AI accelerators will top $200 billion in 2026. AMD is a well-run company that Nvidia won't be able to keep down. The market is large and lucrative enough for both of them to achieve substantial growth in revenue and per-share earnings over the next several years.
AMD's stock has risen nearly 158% year to date as of July 23. Nvidia, on the other hand, has declined significantly since reaching a 52-week high in mid-May. Nvidia stock is up only 12% year to date as of this writing.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.