Nvidia Might Not Be The Biggest Threat to AMD’s Current Market Position
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AMD (NASDAQ:AMD | AMD Price Prediction) and Alphabet (NASDAQ:GOOGL) reported third-quarter results within a week of each other. Both reports point to the same contest: AI accelerators. AMD’s Data Center sales nearly doubled. Google Cloud revenue grew 103%, helped by TPU system sales to outside customers. Investors usually treat NVIDIA (NASDAQ:NVDA) as AMD’s main rival. Google may be the quieter threat.
Helios Ramps at AMD While TPUs Power Google Cloud
AMD posted revenue of $13.377 billion, up 44.7%. Data Center revenue reached $8.546 billion, and segment operating margin rose to 34% from 25%. That jump shows Instinct GPUs and EPYC CPUs scaling profitably. Lead customers, including Anthropic and OpenAI, brought their first Helios racks online. Gaming fell 40% to $773 million as console chip sales slowed.
Alphabet’s Cloud operating income rose to $11.121 billion from $3.594 billion. Sundar Pichai said, “We’re also seeing strong demand for our TPU systems across a wide range of customers.” Cloud growth sped up from 48% in the fourth quarter of 2025 to 63%, 82%, then 103%. TPU racks Google sells can fill data center slots an Instinct GPU could have taken.
| Business Driver | AMD | Alphabet |
|---|---|---|
| AI Product | Instinct GPUs, Helios racks | TPU systems via Google Cloud |
| Sales Model | Merchant silicon | Chips, cloud and Gemini models in one stack |
| Weak Spot | Gaming down 40% | Free cash flow of -$9.065 billion |
A Chip Supplier Now Competing With Its Own Customer
On AMD’s earnings call, analysts pressed CEO Lisa Su on custom chips designed by customers. She answered, “The key is for us to continue to show that TCO advantage across workloads.” AMD is designing MI500 and MI600 together with frontier labs and buying Taalas for specialized inference silicon. Those moves show it takes custom chips seriously. Google Cloud runs instances on 5th Gen AMD EPYC CPUs, so AMD still sells Google processors while TPUs compete for accelerator budgets. Alphabet’s quarterly capital spending hit $51.355 billion, up 114%. It is spending that much to build out the full stack.
Fourth-Quarter Helios Shipments Will Test AMD’s Grip
AMD guided fourth-quarter revenue to about $17 billion, plus or minus 3%. Su also said “demand is higher than supply.” I will be watching whether that shortage pushes impatient buyers toward TPU capacity. You should also track how specific Google gets about its TPU customers. “A wide range” is still vague.
AMD Keeps Its Growth Edge as Its Second-Place Spot Comes Under Pressure
AMD expects revenue to grow more than 80% in 2027, and its shares are up 158.17% year to date. Alphabet’s shares are down 6.06% over the same stretch. To me, AMD remains the purer AI hardware growth story. Still, its second-place position looks less secure now that a capable rival also buys its chips.
Alphabet trades at a P/E near 13, a valuation that reflects a business still supported by Search. Its negative free cash flow makes me more cautious. If TPUs start showing up at labs now running Helios, AMD’s accelerator position would face a direct challenge.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
