Nvidia's Earnings and CPU Expansion Pose Challenge for AMD and Intel
Nvidia delivered strong second-quarter earnings that exceeded Wall Street expectations and raised its third-quarter guidance. The company also projected a significant revenue growth of 70% in fiscal 2028, far above the market’s estimate of 44%. During the call, Nvidia announced plans to expand into CPU sales with its new Vera CPU designed for AI agents. The introduction of agentic AI has increased demand for CPUs as they are better suited for orchestrating complex workflows. This growth in CPU usage is beneficial for companies like AMD and Intel but poses a direct threat due to Nvidia's entry into the market. The company expects $20 billion in CPU sales by fiscal 2027, with plans to more than double that number by 2028. Despite this challenge, there are signs of continued growth for agentic AI and server CPUs overall. Bank of America analyst Vivek Arya recently raised his total addressable market estimate from $170 billion to $210 billion by 2030 due to the rise in AI adoption.
Topics: agentic AI AI CPU GPU semiconductors