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Advanced Micro Devices Inc (Nasdaq: AMD) is laser focused on expanding its footprint in artificial intelligence, but the multinational continues to be a distant second to Nvidia Corp (NASDAQ: NVDA) in that space.

Nvidia has already become a $3 trillion behemoth while AMD sits at about $178 billion only.

However, while it may feel more like wishful thinking at writing, there’s still reason to believe that Advanced Micro Devices could one day be bigger than NVDA.

The AI stock is currently down about 15% versus its year-to-date high.

Why AMD surpassing Nvidia is a real possibility

Historically, the global chips market has seen leads change not once but several times over the past two decades.  

In 2006, Intel was the biggest name in graphic chips, followed by AMD and then NVDA.

But just a year later, Nvidia had already surpassed Advanced Micro Devices in that market.

Similarly, in 2021, Intel was the leader in data centres with a 64% market share, while Nvidia stood at second with about 27%, and AMD next at 9.0% only.

But just two years later, Intel was down to 26% while Nvidia had rallied to 66%.  

Point being, leadership in the chips market tends to shift hands, and that to, pretty quickly – and while past performance is not indicative of future results, data suggests the possibility of AMD one day taking over Nvidia is believable to say the least.

AMD is already winning large-scale customers

It’s worth mentioning that AMD is fully committed to rolling out products that compete directly with Nvidia’s latest AI chips.

For example, its MI325X accelerator launched last quarter goes up against the rival’s H200, while the recently unveiled MI350 chip will compete with NVDA’s Blackwell series later in 2025.

More importantly, AMD chips seem to be faring well against Nvidia’s, which is why the tech titans like Microsoft and Meta Platforms have already agreed to be customers.

Plus, Lisa Su, its chief executive, has eyes on eventually making Advanced Micro Devices Inc an “end-to-end” solution that she believes is what helped Nvidia notch up a market cap of $3 trillion.

“This is the beginning, not the end, of the AI race,” she said last year.

Nvidia doesn’t have to lose for AMD to win

Most importantly, AMD doesn’t necessarily have to steal share from Nvidia to uncrown it as the leader of the artificial intelligence market.   

Su expects AI chips to be a $400 billion market over the next two to three years – and AMD and NVDA currently make up a little over $30 billion of that space only.

So, there’s ample room for Advanced Micro Devices to gain share from elsewhere and threaten Nvidia’s dominance down the line.  

Note that year-to-date, Nvidia shares are actually down more than AMD at the time of writing.

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