Nvidia's 85% GPU Market Share Faces Growing Competition: Is This AI Stock Still a Buy for 2026?

Core Viewpoint - The AI hardware market is becoming increasingly competitive, yet Nvidia remains a dominant player with significant market share and growth potential [1][2]. Company Overview - Nvidia's graphics processing units (GPUs) are integral to AI applications, achieving an impressive 85% market share, positioning the company nearly as a monopoly [2]. - The company has experienced substantial growth, with a market capitalization of $4.6 trillion and a stock price increase of 1,252% over the past five years [5][7]. Financial Performance - In Q3 2025, Nvidia reported revenue of $57 billion, reflecting a 62% year-over-year increase, while net income surged by 65% and diluted earnings per share (EPS) grew by 67% [7]. - Cash reserves increased from $43.2 billion in January 2025 to $60.6 billion by October 2025, allowing the company to cover its $10.82 billion debt nearly six times over [8]. - Nvidia boasts a gross profit margin of 70% and a net income margin of 53%, indicating strong profitability [8]. Competitive Landscape - Competitors such as Advanced Micro Devices (AMD) and Qualcomm are emerging, with AMD holding a 7% market share and Qualcomm targeting lower-end AI users [2][4]. - Despite AMD's growth of only 0.8% in Q3 2025, it remains a slow-growing rival, while Qualcomm's new chips are expected to enter the market in the near future [4]. Market Influence - Nvidia is the preferred choice for major AI software developers, including OpenAI and Microsoft, which further solidifies its market position [5]. - The company has consistently exceeded earnings expectations in the last five quarters, indicating strong market confidence [9].