Nvidia posts $81.6B quarter as AMD, Intel gain in AI race

Nvidia's AI chip dominance remains intact, but AMD and Intel delivered strong stock gains in the first half of 2026 as the AI buildout broadened beyond a single winner.

Nvidia retained its AI chip crown in the first half of 2026, posting $81.6 billion in quarterly revenue, while AMD and Intel delivered strong stock gains as the AI infrastructure cycle lifted all three major chipmakers.

"Nvidia kept its AI chip crown, while AMD and Intel delivered strong stock gains for investors," a Motley Fool analysis published July 25 said. "AMD proved it is the leading challenger, but Nvidia's market dominance remains overwhelmingly intact."

Nvidia reported $81.6 billion in revenue for the quarter ended April 26, up 85 percent from a year earlier. For fiscal 2026, the company posted $215.9 billion in revenue, a 65.5 percent increase, with net income of $120.1 billion producing a 55.6 percent margin. Nvidia generated $96.7 billion in free cash flow and carries a debt-to-equity ratio of 0.1 times.

The AI chip market remains supply-constrained, with Nvidia's data center business capturing the majority of hyperscaler spending. But AMD's MI300X and Intel's Gaudi 3 accelerators have begun winning design slots at tier-two cloud providers, threatening Nvidia's near-total dominance of the training segment.

Nvidia's fiscal 2026 performance reflected sustained demand from Microsoft, Amazon and Alphabet, though two direct customers represent roughly 22 percent and 14 percent of total revenue, creating concentration risk. The company acquired Kumo AI for about $400 million in June to expand its predictive capabilities and clarified it is not in talks to acquire any PC manufacturers, pushing back against market speculation.

AMD has positioned itself as the primary alternative to Nvidia in AI training and inference. Its MI300X accelerator, built on TSMC's 5-nanometer process, has secured design wins at hyperscale customers seeking second-source suppliers. Intel's Gaudi 3 targets the inference segment, where latency and cost-per-query matter more than raw training throughput.

Valuation Divergence Signals Market Skepticism

Nvidia trades at 23 times forward earnings, a discount to its historical average of about 35 times, suggesting the market is pricing in a growth deceleration. Its price-to-sales ratio of 23.3 times reflects the premium investors assign to its AI leadership, but the compression in its forward P/E multiple indicates concern about customer concentration and competitive pressure from AMD and in-house chips from cloud providers such as Amazon's Trainium.

What the Second Half Holds

All three companies face a common headwind: hyperscaler capital expenditure growth is decelerating. UBS estimates hyperscaler capex will rise 76 percent this year to $673 billion, but growth slows to 25 percent next year and just 6 percent in 2028. That trajectory could compress margins across the sector if supply catches up with demand.

For investors, the divergence in stock performance between Nvidia and its challengers may narrow in the second half. Nvidia's dominance in training remains unchallenged for now, but AMD and Intel offer exposure to the AI theme at lower valuation multiples — assuming they can convert design wins into meaningful market share.

This article is for informational purposes only and does not constitute investment advice.