Key Points
Investors of Advanced Micro Devices (NASDAQ: AMD) have a big event coming up, and it really has nothing to do with AMD at all. Nvidia (NASDAQ: NVDA) reports Q2 earnings on Aug. 26, and what it says could have major implications on the market’s view of AMD. In 2026, AMD dramatically outperformed Nvidia, rising about 120% versus Nvidia’s 16%. That’s a pretty stark outperformance, driven by the market’s belief that AMD can take market share from Nvidia.
Depending on how strong Nvidia’s results are, the investment community could shift its preference from AMD to Nvidia following earnings, and all it will take is Nvidia doing exactly what’s expected of it.
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AMD’s data center division growth rate recently surpassed the last numbers we have from Nvidia
Comparing AMD and Nvidia is natural. They compete in many industries, including the all-important data center infrastructure sector. AI data centers are a large use case for computing equipment, and these two must establish a strong foothold and maintain it throughout the build-out. So far, Nvidia has been dominating this battle, but AMD’s Q2 results may have flipped that analysis on its head.
The last time we heard from Nvidia was its Q1 FY 2027 results (ending April 26). AMD reports on a traditional calendar year schedule, so Nvidia’s Q1 encompassed about one month of the same time frame as AMD’s Q2. During Nvidia’s Q1, its data center division grew at 92%, which is pretty impressive. However, during AMD’s Q2, it surpassed that growth rate, growing at 107%. Nvidia’s data center revenue was $75.2 billion versus AMD’s $6.7 billion, but that doesn’t matter as much, as investors care more about AMD’s potential to gain market share.
Overall, Nvidia still holds the faster growth rate, with overall revenue rising at an 85% clip versus AMD’s 50% rise. What AMD investors will be looking for in Nvidia’s Q2 report is whether Nvidia’s data center division can grow at a faster clip than AMD’s. If it can, then AMD’s recent gains over Nvidia may be for nothing. If AMD takes the crown, it will justify its recent outperformance and secure its place as a rising star in the AI world.
We’ll see what happens on Aug. 26, but if I had to guess, I’d say Nvidia’s data center growth rate will far outpace AMD’s Q2, leading to a revival in its stock. That could cause some selling pressure on AMD’s stock, as the funds to buy Nvidia have to come from somewhere, and with AMD’s impressive performance so far this year, it could come from selling it.
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Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
