Nvidia's Explosive Growth Leaves AMD and Intel in the Dust
Nvidia's second-quarter earnings have sent shockwaves through the tech industry, particularly for Advanced Micro Devices (AMD) and Intel. The company easily beat Wall Street consensus estimates and raised third-quarter guidance beyond expectations.
The real kicker came when Nvidia CFO Colette Kress said the company expects 70% annual revenue growth in fiscal 2028, surpassing the market's projection of 44%. This news has significant implications for AMD and Intel, as Nvidia has successfully transitioned into a CPU leader.
Nvidia's Vera CPU, introduced last quarter, is specifically designed to run AI agents. According to Kress, Nvidia expects $20 billion in CPU sales for fiscal year 2027, with this number more than doubling in fiscal 2028. This puts pressure on AMD and Intel, which have been struggling to keep up with the demand for CPUs.
Despite the challenges faced by AMD and Intel, there is a silver lining for both companies. Agentic AI is expected to continue growing exponentially, providing opportunities for all players in the market. Bank of America analyst Vivek Arya has raised his estimates for the total addressable market (TAM) for server CPUs, predicting it will reach $210 billion by 2030.