(Bloomberg) — This earnings season has delivered plenty of good news for the artificial intelligence trade, but instead of bidding up Nvidia Corp. shares, investors have been dumping them.<\/p>\n
Most Read from Bloomberg<\/p>\n
Nvidia, whose graphics processing units, or GPUs, dominate the market for AI chips, has fallen 7% since closing at a record high on April 27. Over that span, the stock is one of the worst performers in the Philadelphia semiconductor index, which is up about 9%.<\/p>\n
The reason is that even as tech giants keep pledging to spend more on computing gear, Nvidia\u2019s grip on the AI processor market is seen as increasingly under threat from other chipmakers as well as its biggest customers.<\/p>\n
Nvidia rose as much as 2.6% in early trading Wednesday.<\/p>\n
On Tuesday the Information reported that Anthropic PBC, which is already a major customer of Google\u2019s chips, is planning to spend about $200 billion with the Alphabet Inc.-owned company over the next five years. That comes a week after Alphabet said it would start offering its tensor processing unit, or TPU, chips to select customers for use in their own data centers.<\/p>\n
Amazon.com Inc., meanwhile, said its Trainium line of custom AI chips have more than $225 billion in revenue commitments and it recently announced a multi-billion dollar pledge from Meta, which is itself preparing to deploy homegrown AI chips. Meanwhile, Intel Corp. is benefiting from AI growth and Qualcomm Inc. is also making headway in the data center market.<\/p>\n
\u201cThe problem with having basically 100% market share is that there\u2019s only one direction for it to go, and it certainly seems like these companies could be credible competitors,\u201d said Bill Stone, chief investment officer at Glenview Trust Company.<\/p>\n
There\u2019s little evidence so far to suggest that Nvidia is losing significant ground to rivals. The company\u2019s share of the AI accelerator market was 86% in 2025, unchanged from 2024, according to data compiled by Bloomberg Intelligence. But the threat is raising doubts about the outlook for its long-term growth and making other stocks look relatively more attractive.<\/p>\n
Nvidia shares are up 7.8% this year, roughly in line with the S&P 500, but the gain pales in comparison to other chip-related companies. The Philadelphia semiconductor index has jumped 60%, leaving Nvidia as one of the worst performers among the benchmark\u2019s 30 constituents in 2026.<\/p>\n
Story Continues <\/p>\n
\u201cIf we start to get the sense that Nvidia is losing marginal business, that rivals are chipping away at its market share or pricing power, then that could start to erode its earnings momentum and we could see the stock fall off as a result,\u201d said Stone, who helps oversee $18 billion in assets.<\/p>\n
A representative for Nvidia declined to comment, citing a quiet period.<\/p>\n
Insatiable demand for AI computing gear fueled Nvidia\u2019s rise to become the world\u2019s most valuable company with a market value of $4.8 trillion. But it\u2019s close to being overtaken by Alphabet, which has seen its market value soar by more than $2.5 trillion over the past year amid excitement about its AI services, which include its popular Gemini chatbot, as well as cloud computing and chip businesses. Alphabet closed on Tuesday with a market value of about $4.7 trillion.<\/p>\n
Of course, Nvidia\u2019s revenue growth is still booming. The projected 70% expansion in its current fiscal year, which ends in January, dwarfs growth expected from other megacaps and would be an increase from last year\u2019s 65% clip. But it\u2019s expected to slow to 32% in fiscal 2028, before narrowing further in the subsequent two years. The company is scheduled to report first quarter earnings on May 20.<\/p>\n
For Nvidia\u2019s bulls, demand for AI processors remains so strong that there\u2019s plenty of revenue growth to go around. Alphabet, Amazon, Meta and Microsoft, plan to spend as much as $725 billion this year on capital expenditures and significantly more in 2027. The four companies account for about 45% of Nvidia\u2019s revenue, according to supply chain data compiled by Bloomberg.<\/p>\n
However, most of these companies \u201cappear to be putting equal emphasis on heterogenous deployments\u201d of both Nvidia\u2019s chips and custom-made chips, Bank of America analyst Vivek Arya wrote in a research note on April 29.<\/p>\n
Notably, Alphabet\u2019s TPUs are seen as one of the best alternatives to Nvidia\u2019s products, and the business has been called Alphabet\u2019s \u201csecret sauce\u201d given they were specifically designed to accelerate machine learning workloads.<\/p>\n
In a sign of how meaningful this business could be, Citizens analyst Andrew Boone estimated that Alphabet will generate about $3 billion of revenue from TPU-related infrastructure in 2026, increasing to $25 billion in 2027.<\/p>\n
\u201cI wouldn\u2019t say that Nvidia\u2019s competitive positioning is materially threatened by these new chips, but the market action in Nvidia reflects how people are starting to question its market share, its competitive moat, and its margins,\u201d said Clayton Allison, portfolio manager at Prime Capital Financial, which has about $40 billion in assets.<\/p>\n
Late Tuesday, Advanced Micro Devices Inc. said it\u2019s expecting a significant jump in demand for central processing units, or CPUs, as the type of generalist chips take on a bigger role in running AI services. AMD jumped 20% on Wednesday.<\/p>\n
None of this has dampened enthusiasm about Nvidia among Wall Street analysts. Of the 80 tracked by Bloomberg that cover the company, there are only three hold ratings and one sell. Estimates for Nvidia\u2019s earnings in fiscal 2027 have risen by 11% over the past quarter, while the view for revenue is up by the same amount. Estimates for 2028 have moved up even higher, suggesting investors remain confident about its long-term trajectory.<\/p>\n
\u201cNvidia used to be the sure thing in AI, but it has fallen out of favor on that front, while Alphabet is now the can\u2019t-miss AI darling,\u201d said Glenview\u2019s Stone. \u201cI don\u2019t think new chips will represent a fatal blow, but they\u2019ll make it harder for Nvidia to regain its momentum. I\u2019m not selling, but I\u2019m not buying the dip, either.\u201d<\/p>\n
Tech Chart of the Day<\/p>\n
Top Tech Stories<\/p>\n
Advanced Micro Devices, the leading challenger to Nvidia in AI computing chips, soared to new heights in premarket trading after a flood of data center spending bolstered its sales forecast.<\/p>\n<\/li>\n
Samsung Electronics Co. reached a $1 trillion market valuation after shares in the world\u2019s largest memory maker more than quadrupled over the past year on booming demand for the chips used in artificial intelligence.<\/p>\n<\/li>\n
Infineon Technologies AG forecast revenue that beat analysts\u2019 expectations in the current quarter as the German chipmaker benefits from a spending boom on artificial intelligence infrastructure.<\/p>\n<\/li>\n
Alphabet needs to borrow heavily to fund investments in artificial intelligence, and it\u2019s increasingly tapping every market to do so.<\/p>\n<\/li>\n
Anthropic PBC unveiled a set of new artificial intelligence agents designed to handle a broader mix of financial services tasks, part of the company\u2019s push to win over Wall Street.<\/p>\n<\/li>\n<\/ul>\n
Earnings Due Wednesday<\/p>\n
Earnings Premarket:<\/p>\n<\/li>\n
Earnings Postmarket:<\/p>\n
Cirrus Logic Inc. (CRUS US)<\/p>\n<\/li>\n
Alpha & Omega Semiconductor (AOSL US)<\/p>\n<\/li>\n
American Bitcoin Corp. (ABTC US)<\/p>\n<\/li>\n
Clearfield Inc. (CLFD US)<\/p>\n<\/li>\n
Cognex Corp. (CGNX US)<\/p>\n<\/li>\n
Coherent Corp. (COHR US)<\/p>\n<\/li>\n
Digi International Inc. (DGII US)<\/p>\n<\/li>\n
Fastly Inc. (FSLY US)<\/p>\n<\/li>\n
Fortinet Inc. (FTNT US)<\/p>\n<\/li>\n
Lantronix Inc. (LTRX US)<\/p>\n<\/li>\n
MKS Inc. (MKSI US)<\/p>\n<\/li>\n
Magnite Inc. (MGNI US)<\/p>\n<\/li>\n
Nve Corp. (NVEC US)<\/p>\n<\/li>\n
PTC Inc. (PTC US)<\/p>\n<\/li>\n
Paycom Software Inc. (PAYC US)<\/p>\n<\/li>\n
Red Violet Inc. (RDVT US)<\/p>\n<\/li>\n
SiTime Corp. (SITM US)<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
–With assistance from Subrat Patnaik and Neil Campling.<\/p>\n
(Updates to market open.)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — This earnings season has delivered plenty of good news for the artificial intelligence trade, but instead…\n","protected":false},"author":2,"featured_media":471494,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[261],"tags":[291,289,290,206947,4932,18,19,17,24288,292,82,158143],"class_list":{"0":"post-471493","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-bill-stone","12":"tag-bloomberg","13":"tag-eire","14":"tag-ie","15":"tag-ireland","16":"tag-market-share","17":"tag-nvidia","18":"tag-technology","19":"tag-the-alphabet"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116528476784184565","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/471493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=471493"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/471493\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/471494"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=471493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=471493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=471493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}