Nvidia +3% vs AMD +171% in 2026: Why the AI Chip Leader Fell Behind
Disclaimer: This article is for educational purposes only. It does not constitute financial advice. Data as of Friday July 3, 2026 close.
One of the most striking paradoxes of the 2026 market: the company at the center of the AI rally has become the black sheep of the chip rally. Nvidia is up just 3.2% year-to-date while Advanced Micro Devices (AMD) has gained 171.25%. Broadcom (AVGO) is up 47%. The divergence is historic.
The divergence in numbers
| Company | YTD 2026 | 3-year return | AI chip market share |
|---|---|---|---|
| Nvidia (NVDA) | +3.2% | +390% | 70-80% |
| AMD (AMD) | +171.2% | +245% | 8-12% |
| Broadcom (AVGO) | +47.4% | +215% | 3-5% (ASIC) |
| Intel (INTC) | +8.7% | −22% | 1-2% |
| ARM Holdings | +38.1% | +180% (since IPO) | Licensing |
Nvidia remains the dominant company. But the stock reflects more than market share.
The four reasons Nvidia underperformed
1. Everything good was already priced in
Nvidia entered 2026 trading at 55x forward earnings after 4x-ing in two years. The market had already discounted the AI chip market expansion through 2028. Each quarter it needed to beat expectations by wide margins just to justify valuation. It is what's known as "priced for perfection".
2. Broadcom and custom ASICs
Alphabet, Meta and Amazon are designing their own custom chips (ASICs) fabricated by Broadcom instead of buying Nvidia H100/H200/Blackwell GPUs. Google TPU v5, Meta MTIA, Amazon Trainium. Bloomberg Intelligence forecasts the ASIC market will grow 27% CAGR through 2033, versus 16% for GPUs. Every gigabuck of capex Meta or Alphabet shifts to ASIC is a gigabuck Nvidia does not sell.
3. AMD MI450 and the OpenAI contract
AMD announced in Q1 a contract with OpenAI to supply MI450 chips for five years. It also closed a deal with Oracle. Data center revenue rose 57% year-over-year to $5.8 billion in Q1. CEO Lisa Su noted that "leading customer forecasts are exceeding our initial expectations on MI450". For the first time in 15 years, AMD has a competitive AI product.
4. Technical rotation in the sector
When a stock becomes extreme consensus (Nvidia was at start of year, with >20 upgrades and median price target at highs), mean reversion alone pushes funds to look for alternatives. AMD, INTC and Broadcom have received flows leaving Nvidia without any change in sector fundamentals.
Is Nvidia really losing dominance?
Market share remains at 70-80%, essentially unchanged over 12 months. Revenues are still growing. The problem is not dominance, it is marginal growth speed. The law of large numbers: when you bill $130 billion in a year, adding another $40 billion requires a market growing at triple digits.
AI chip demand continues to grow, but the scenario in which "everything runs on Nvidia" is starting to soften. Most likely 3-year scenario: Nvidia keeps 55-65% share while total market keeps expanding.
Five questions for the August 20 earnings call
- 1.How much revenue is already from Blackwell vs Hopper?
- 2.What percentage of Alphabet, Meta and Amazon capex goes to Nvidia vs ASIC?
- 3.What is the pipeline with OpenAI and Anthropic for 2027?
- 4.What gross margin is sustainable with AMD MI450 in the market?
- 5.What is exposure to China export controls (H20, B30)?
H2 scenarios for Nvidia
Bull case
Blackwell exceeds expectations, Q3 guide beats consensus, commentary on ASIC minimizes the threat. Stock rebounds toward $180-200 in September. Rotation back from AMD/AVGO to the leader.
Base case
In-line beat, Q3 guide in the range. Stock rangebound at $140-160 while the market awaits clarity on MI450 in production.
Bear case
Gross margin miss, more conservative guidance, one key customer (Alphabet or Meta) announces partial migration to ASIC. Stock tests $115-125.
Frequently Asked Questions
Should I sell Nvidia and buy AMD?
This article does not give recommendations. Objective data: Nvidia trades at lower forward P/E than a year ago, with gross margins above 70%. AMD trades at higher forward P/E than Nvidia for the first time ever, with gross margins of 55%. The rotation makes short-term sense; sustainability depends on MI450 execution.
What are ASICs and why do they worry Nvidia?
ASIC stands for "Application-Specific Integrated Circuit". Chips designed for a specific task (e.g., training a specific LLM model), enabling higher energy efficiency at lower cost than a general-purpose GPU. Tradeoff: less flexibility. Google, Meta and Amazon have bet on Broadcom-designed ASICs for their most predictable internal workloads.
Is Nvidia still the leader?
Yes, in share (70-80%) and in current-generation tech (Blackwell). Leadership is measured on two dimensions: market share (comfortable) and earnings growth speed (moderating). The stock price reflects the second more than the first.
Reference sources: Bloomberg Intelligence, Nvidia Investor Relations (nvidia.com/en-us/investors), AMD Investor Relations (ir.amd.com), Semianalysis, 24/7 Wall St.
Written by the StocksAnalyzer team. Content reviewed and updated as of July 5, 2026.