Nvidia’s stock is trailing its semiconductor peers, gaining just 8% in the last month while rivals have surged over 40% on the back of a structural shift in the AI hardware market.
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Nvidia stock lags rivals with 8% gain as AI shifts to CPUs
Nvidia Corp. shares are trailing the blistering rally in semiconductor stocks, a divergence that signals a structural shift in the hardware powering artificial intelligence. While the chipmaker gained 2.4% in premarket trading Wednesday, its 7.9% rise over the past month pales in comparison to the more than 40% gains for rivals, including a 20% surge for Advanced Micro Devices Inc. following its strong earnings report.
“As AI adoption scales, demand is increasing not only for accelerators, but also for the high-performance CPUs that power and orchestrate those workloads,” AMD Chief Executive Officer Lisa Su said on the company’s recent earnings call, highlighting a market shift from AI training to inference.
The hardware preferences are changing as the AI industry matures. The initial phase, focused on training large language models, was dominated by Nvidia’s graphics processing units (GPUs). Now, the focus is shifting to inference, the process of running those models, where central processing units (CPUs) play a more critical role. AMD’s data center revenue underscored this trend, jumping 57 percent year-over-year to $5.8 billion in the first quarter, driven by strong demand for its Epyc CPUs and Instinct GPUs. The company now forecasts the server CPU market will grow more than 35 percent annually to exceed $120 billion by 2030, doubling its projection from just six months ago.
For investors, the trend challenges Nvidia’s nearly $5 trillion valuation and its long-standing dominance in AI chips. While Nvidia began selling its own stand-alone CPUs this year, it’s a small fraction of its business. Until the company demonstrates significant momentum in the server CPU space, its stock may continue to underperform peers who are better positioned for the inference-driven phase of AI growth.
AMD’s Ascent
AMD’s first-quarter results sent a clear signal that demand for its processors is accelerating. The company reported total revenue of $10.25 billion, beating estimates, and projected second-quarter sales of about $11.2 billion, also ahead of Wall Street’s expectations. Su said the company is working to “meaningfully increase” its production capacity to meet the demand, expressing confidence in its supply chain and visibility into data center build-outs through 2027.
The surge in CPU demand is not isolated to AMD. Intel Corp. also posted strong data center growth in its recent quarterly report, with revenue of $13.6 billion, sending its shares to an all-time high. The collective results from AMD and Intel (INTC) reinforce the narrative that the AI build-out requires a massive investment in both GPUs and CPUs, a market dynamic that benefits Nvidia’s competitors.
Nvidia’s stock, already a consensus holding for most large funds, is less reactive to broad industry news. The stock’s 14-day relative strength index (RSI) has remained in overbought territory for much of the past month, yet the gains have been muted compared to AMD’s explosive move. While HSBC recently trimmed its rating on AMD to Hold after its April surge, the market appears to be rewarding companies that can capitalize on the booming demand for inference computing. For Nvidia to rejoin the rally with the same vigor as its peers, it will need to prove it can capture a meaningful share of the rapidly expanding server CPU market.
This article is for informational purposes only and does not constitute investment advice.
[1] Nvidia Stock Isn’t Soaring With the Other Chip Players. Here’s Why.[2] Ocugen, Inc. (OCGN) Q1 2026 Earnings Call Transcript[3] AMD posts Q1 2026 data center revenue of $5.8bn, forecasts $120bn server CPU income by 2030[4] Earnings live updates: Supermicro stock soars as AI server demand lifts outlook, CVS and Disney gain[5] AMD and Intel Extend Rally Despite RSI Flashing Overbought for Weeks
