Counterpoint Research analyst Neil Shah said the rise of Agentic AI is reshaping the semiconductor industry by increasing demand for CPUs, GPUs, memory, and AI infrastructure as enterprises build gigawatt-scale AI systems.



<h2>AMD Expands Its AI Infrastructure Position</h2>



Shah said on Thursday that Advanced Micro Devices, Inc. (NASDAQ:AMD) delivered blockbuster first-quarter 2026 results as revenue rose 38% year over year to $10.3 billion, driven by strong demand for CPUs and accelerators.



He noted that AMD’s data center revenue climbed 57% to $5.8 billion, accounting for 56% of total revenue.



He said AMD strengthened its position as the only credible full-stack merchant alternative to NVIDIA Corp. (NASDAQ:NVDA) by offering CPUs, GPUs, FPGAs, networking, packaging, ROCm software, and rack-scale solutions.



Shah added that AMD aims to narrow the gap with NVIDIA, whose data center revenue still stands at roughly 7 times AMD’s.



Shah also said Agentic AI is reviving CPU demand because AI workloads now require more balanced compute architectures.



He highlighted strong traction for 5th-Gen EPYC processors across cloud and edge deployments and said AMD expects CPU revenue to rise 70% year over year next quarter.



He added that AMD’s upcoming 6th-Gen Zen 6 EPYC chips, built on Taiwan Semiconductor Manufacturing Co. Ltd.’s (NYSE:TSM) 2nm process, could drive further growth.



<h2>NVIDIA Maintains Leadership As AI Inferencing Gains Momentum</h2>



Shah said announcements at NVIDIA GTC showed AI inferencing taking center stage, with growing attention on token economics and efficient compute architectures.



He described NVIDIA and AMD as a “two-horse race” in full-stack AI infrastructure while noting that NVIDIA still dominates the market.



Shah said the upcoming competition between AMD’s MI400 series and NVIDIA’s Rubin Ultra platform will become a key battleground next year.



He also said NVIDIA continues to benefit from the broader AI infrastructure boom as hyperscalers and enterprises expand investments in GPUs, memory and rack-scale systems.



<h2>Intel, TSMC And Other Ecosystem Players Shape The AI Supply Chain</h2>



Shah said Intel Corp.’s (NASDAQ:INTC) supply issues and inability to meet CPU demand helped AMD gain server CPU market share and potentially surpass Intel in x86 server CPUs.



He added that ARM-based server CPUs are emerging as another strong alternative, although x86 architectures still dominate the market.



He highlighted Taiwan Semiconductor as a critical enabler of next-generation AI chips, saying competition for its N2, N3, and CoWoS capacity will intensify this year.



Shah also pointed to Samsung Electronics Co., Ltd.’s (OTC:SSNLF) HBM4 collaboration with AMD as an important memory partnership for future AI accelerators.



Beyond chipmakers, Shah identified Meta Platforms, Inc. (NASDAQ:META), OpenAI, Anthropic, Amazon.com, Inc. (NASDAQ:AMZN) Amazon Web Services, Alphabet Inc. (NASDAQ:GOOGL) Google Cloud, Microsoft Corp. (NASDAQ:MSFT) Azure, and Tencent Holding Ltd. (OTC:TCEHY) as major AI infrastructure customers driving semiconductor demand.



He also cited Wistron Corp and Foxconn Industrial Internet as important downstream manufacturing partners supporting gigawatt-scale AI deployments.



Price Action: NVIDIA shares were up 0.47% at $208.80 and Advanced Micro Devices shares were down 0.88% at $417.70 during premarket trading on Thursday, according to Benzinga Pro data.



Photo via Shutterstock

AMD's Q1 revenue reached $10.3 billion, a 38% year-over-year increase, with its data center business surging 57% to $5.8 billion. AI inference demand fueled demand for server chips. Is AMD firmly established as the second-largest player in AI chips? Feel free to share your thoughts below!

AMD's Q1 revenue reached $10.3 billion, a 38% year-over-year increase, with its data center business surging 57% to $5.8 billion. AI inference demand fueled demand for server chips. Is AMD firmly established as the second-largest player in AI chips? Feel free to share your thoughts below!

AMD Beats Estimates, Data Center Revenue Soars 57%

AMD has solidified its position as a key player in the AI market, reporting a 38% revenue increase to $10.3 billion, with data center revenue soaring 57% to $5.8 billion. Analyst Neil Shah highlights the impact of Agentic AI on CPU demand and AMD's competitive stance against NVIDIA. The upcoming 6th-Gen Zen 6 EPYC chips are expected to drive further growth. Despite AMD's gains, NVIDIA remains the market leader, with significant investments in AI infrastructure from major tech companies. AMD's stock fell 0.88% to $417.70, while NVIDIA's rose 0.47% to $208.80 in premarket trading.

The NVIDIA Alternative: AMD Cements Status As The Only Other AI Full-Stack King