The Motley Fool·2026-02-07 16:15Core Insights - Nvidia and AMD are leading players in the AI chip market, experiencing significant growth during the AI boom [1][2] - AMD reported record revenue and strong profitability, with a 34% increase in revenue to over $10 billion, and a gross margin expansion to 54% [6][7] - Nvidia is expected to report a 67% year-over-year revenue increase, surpassing $65 billion for the quarter, with strong demand for its GPUs [8][9] AMD Performance - AMD's quarterly earnings showed a record revenue and profitability, with expectations of significant sales growth this year [3][6] - Despite positive earnings, AMD's stock fell 17% following the report due to a disappointing first-quarter forecast, although revenue predictions of $9.8 billion exceeded expectations [4][7] - CEO Lisa Su indicated a multiyear demand super cycle for high-performance and AI computing [7] Nvidia Outlook - Nvidia is set to report its fiscal 2026 fourth-quarter and full-year earnings, with a strong track record of exceeding analyst estimates [8] - The average analyst estimate for Nvidia's revenue is projected to climb 67% year over year, reflecting strong demand for its products [8][9] - Concerns about high valuations and potential AI spending slowdowns may impact stock performance despite positive earnings [10][11] Market Sentiment - The semiconductor industry, including TSMC, has reported strong demand, contributing to optimism for Nvidia's upcoming earnings [9] - Short-term stock performance may not reflect the positive earnings report, similar to AMD's situation, but long-term prospects for Nvidia remain strong [11][12] - AMD's stock drop may serve as a cautionary signal for Nvidia shareholders regarding potential short-term turbulence [12]