Nvidia and AMD Face Chip Sell-Off as Investors Weigh 2027 AI Prospects
Major semiconductor stocks Nvidia and AMD have pulled back amid a broader sector sell-off, prompting investors to reevaluate their growth and valuation metrics heading into 2027.
📈MarketsPhoto: Motley Fool
Key points
- Semiconductor sector index dropped 20% over the past month amid a broader tech sell-off.
- Nvidia shares fell 26%, while AMD retreated 15% over the same monthly period.
- Nvidia projects a 70% revenue increase for fiscal 2028, supported by its new Vera Rubin systems.
- AMD's data center revenue jumped 97% year over year, with management expecting the segment to drive over 80% of total revenue by 2027.
Semiconductor stocks have faced a sharp downturn recently, highlighted by a 20% decline in the PHLX Semiconductor Sector index over the past month. Industry leaders Nvidia and AMD have both felt the pressure, with AMD retreating 15% and Nvidia dropping 26% over the same timeframe. This pullback has caused Nvidia to temporarily relinquish its position as the world's largest company, despite strong underlying financial metrics for both firms.
Nvidia continues to dominate the artificial intelligence chip landscape, with data provider Silicon Analysts projecting the company will maintain a 75% market share by the end of 2026. The firm has commenced volume shipments of its Vera Rubin server systems, which deliver significantly higher performance-per-watt than previous generations. Looking ahead, Nvidia anticipates a 70% increase in fiscal 2028 revenue, alongside projected earnings per share growth of 71%. Analysts maintain a median 12-month price target of $318 for Nvidia, pointing to an estimated 88% potential upside from current levels.
Meanwhile, competitor AMD is capturing market attention through rapid expansion in its data center division, which reported a 97% year-over-year revenue surge to $8.5 billion last quarter. AMD projects that data center operations will comprise over 80% of its total revenue by 2027, with overall annual revenue expected to climb more than 80% next year. Consensus estimates tracked by Yahoo! Finance indicate that AMD's earnings per share growth could accelerate to 108% in 2027, positioning the company as a formidable challenger in the AI hardware space.
What to watch next: Monitor upcoming quarterly delivery volumes for Nvidia's Vera Rubin architecture and AMD's data center revenue expansion to gauge shifting market share dynamics.
Source Motley Fool — fool.com/investing/2026/11/12/nvidia-vs-amd-which-is-the-better-art… ↗
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