Is AMD's 17% Decline a Warning for Nvidia Shareholders Ahead of Feb. 25?

Many players are participating successful the high-growth tract of artificial quality (AI). But 2 successful peculiar basal retired arsenic they marque cardinal tools captious to the improvement and functioning of AI. I'm talking astir spot designers Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD).

Nvidia is the spot leader, offering the world's astir almighty graphics processing units (GPUs), and this has resulted successful unthinkable maturation implicit the past fewer years. AMD has proven it tin vie with this marketplace person arsenic it's launched chips rivaling those of Nvidia and has been announcing soaring request and revenue. And investors tin number connected some of these companies for a wide representation of the existent and, potentially, aboriginal AI market.

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AMD was the archetypal to study quarterly net during the existent net season, and the institution announced grounds gross for the 4th and the afloat year, arsenic good arsenic beardown profitability. Chief Lisa Su adjacent said that, based connected the existent situation, AMD expects "significant" income and gross maturation this year.

In spite of these results, though, AMD banal sank 17% successful the trading league pursuing the report. Is this banal performance, pursuing a beardown net report, a informing for Nvidia shareholders up of the marketplace giant's Feb. 25 net report? Let's find out.

So, first, let's see AMD's report. As mentioned, overall, the institution delivered precise affirmative news. In the quarter, gross climbed 34% to much than $10 billion, surpassing analysts' estimates. Gross borderline expanded to 54% from 51% a twelvemonth ago, showing greater profitability connected sales. And Su said the institution is connected way to scope its targets, specified arsenic expanding gross astatine a much than 35% compound yearly maturation complaint implicit the coming 3 to 5 years.

"We are entering a multiyear request ace rhythm for high-performance and AI computing," Su said during the net call.

Still, the banal tumbled successful the pursuing trading league amid disappointment astir the company's first-quarter forecast. Though AMD's prediction for astir $9.8 cardinal successful gross bushed expectations of $9.3 billion, immoderate analysts were expecting adjacent much growth, particularly considering the large request for AI chips astatine the moment.

Now, let's crook to Nvidia. The institution is acceptable to study fiscal 2026 fourth-quarter and full-year net connected Feb. 25 aft the banal marketplace closes. The spot elephantine has a beardown way grounds of surpassing analysts' estimates, and successful caller times, Nvidia has spoken of soaring request for its GPUs. The mean expert estimation calls for gross to ascent 67% twelvemonth implicit twelvemonth to much than $65 cardinal successful the quarter.