TLDR
- AMD reported better-than-expected earnings, indicating healthy AI chip demand
- Export controls impact both AMD ($1.5B revenue loss) and Nvidia ($5.5B charge)
- Super Micro Computer noted customer delays, possibly related to Nvidia’s transition from Hopper to Blackwell
- AMD CEO Lisa Su highlighted “expanding data center and AI momentum”
- Despite recent stock dips, Nvidia remains the dominant player with up to 98% of data center GPU market
The stock price of Nvidia (NVDA) edged up 0.5% in premarket trading on Wednesday, following earnings reports from both Advanced Micro Devices (AMD) and Super Micro Computer (SMCI) that offered mixed signals for the AI chip sector.
Investors had been worried about a potential slowdown in AI adoption. These latest earnings results provided some clarity on where things stand.
AMD delivered very positive news. The company reported record quarterly revenue of $7.4 billion, up 36% compared to the same period last year.
AMD’s data center segment showed particular strength with revenue jumping 57% year over year to reach $3.7 billion. This robust performance exceeded analyst expectations.
AMD CEO Lisa Su directly addressed concerns about AI momentum. She described an “outstanding start to 2025” and specifically mentioned “expanding data center and AI momentum.”
This statement carries significant weight for Nvidia investors. It suggests the AI revolution is not slowing down.
However, the earnings reports also highlighted some challenges facing the industry. AMD warned that U.S. export controls on semiconductors would cost them $1.5 billion in revenue this year.
Export Controls and Transition Challenges
Nvidia faces an even larger impact from these restrictions. The company has already disclosed a $5.5 billion charge related to inventory and purchase commitments for its H20 chip designed for the Chinese market.
Analysts at Jefferies have suggested this could translate to around a $10 billion hit to revenue for Nvidia.
Super Micro Computer, which makes servers housing Nvidia chips, reported earnings at the top end of its guided range. However, it provided disappointing guidance for the current quarter.
The company noted some customers were delaying decisions. This might be related to the transition between Nvidia’s older Hopper hardware and its new Blackwell processors.
Despite these challenges, Nvidia remains in an extremely strong market position. Estimates suggest Nvidia has controlled as much as 98% of the data center GPU market in recent years.
Competition has increased, but the overall market continues to grow. This makes Nvidia well-positioned to benefit from the ongoing AI expansion.
The broader AI market projections remain impressive. According to Bloomberg Intelligence, the generative AI market could be worth $1.3 trillion by 2032.
McKinsey & Company offers an even more bullish outlook, calculating that generative AI could add between $2.6 trillion and $4.4 trillion to the global economy over the next decade.
PricewaterhouseCoopers goes further, valuing the potential contribution at $15.7 trillion by 2030.
Nvidia stock has faced pressure recently, falling 16% since the start of 2025. This drop, combined with the company’s growing profits, has created what some see as a buying opportunity.
The stock is currently selling for 26 times forward earnings, which many consider reasonable for a company at the center of the AI revolution.
Nvidia’s fourth-quarter results from fiscal 2025 (ended January 26) showed revenue of $39.3 billion, representing 78% growth year over year. Earnings per share reached $0.89, an 82% increase.
Despite these impressive results, Nvidia’s stock had declined about 14% since that report was released in early February.
In Wednesday’s premarket trading, Nvidia shares were up 0.5% at $114.13. The stock had fallen 0.3% in Tuesday’s regular session, closing at $113.80.
Super Micro shares were down 4% in premarket trading, while AMD was up 2.6% and Broadcom was rising 0.9%.
