Nvidia’s latest earnings report was supposed to be about one thing: artificial intelligence chips. Instead, buried inside the numbers was a threat aimed squarely at two companies that have never had to worry much about Nvidia before.
The chipmaker is quietly building a business that could reshape a market AMD and Intel have controlled for decades, and the early numbers suggest it is happening faster than either rival expected.
Nvidia’s new CPU business is growing faster than AMD and Intel’s
Nvidia reported second-quarter fiscal 2027 revenue of $96.2 billion, up 106% year over year, with data center revenue reaching $89 billion, up 117%. Buried inside that growth was a smaller but faster-growing business built around server CPUs, The Motley Fool reported.
Nvidia’s Grace server CPU has been around since 2021. Trailing 12-month revenue from Grace has crossed $5 billion, mostly sold as part of larger server systems. Vera is the next step, and it is a different play entirely, a standalone CPU sold as its own product, not bundled into a rack.
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Chief Financial Officer Colette Kress told analysts on the earnings call that Nvidia sees demand for approximately $20 billion in total server CPUs this fiscal year, positioning the company to become a leading CPU supplier. Nvidia has separately cited the server CPU total addressable market at $200 billion, and it expects its own CPU revenue to more than double in fiscal 2028, according to the earnings call transcript.
Nvidia CEO Jensen Huang has framed the push as part of a broader shift toward autonomous AI agents. “Today, the vast majority of AI is prompted by people,” Huang said. “In the future, every company will have a whole bunch of agents; those agents are running continuously.”
Why AMD and Intel should be worried
The threat is not just the dollar figure, but also the growth rate. Nvidia’s overall data center business grew faster last quarter than either AMD’s or Intel’s comparable segments, despite starting from a dramatically larger revenue base. The combination is difficult for smaller rivals to match on pure momentum.
Nvidia’s approach also sidesteps a head-on fight. Rather than competing purely on CPU specs, Nvidia is integrating Vera into its Rubin server rack scale platform, meaning hyperscalers buying the full platform acquire Nvidia CPUs, reducing the role of x86 CPUs from AMD and Intel.
Morgan Stanley called the $20 billion server CPU forecast “unexpected,” since it lands at or above the level of established market leaders. It added that the figure initially caused real skepticism among analysts before customer checks confirmed large-volume potential, SiliconAngle reported.
How Nvidia AMD and Intel stocks stack up right now
AMD’s data center segment, which includes both GPUs and server CPUs, posted $6.7 billion in second-quarter revenue, up 107% year over year.
AMD’s overall x86 server CPU market share reached 34.5% in the quarter, up 7.3 percentage points, while Intel’s share fell to roughly 65.5% of the server CPU market, according to CNBC.
Intel’s data center and AI segment revenue rose 59% year over year to $6.3 billion in the same quarter. Neither AMD nor Intel breaks out standalone server CPU revenue separately from their broader data center totals, making direct comparisons to Nvidia’s Vera figures imprecise but still directionally telling.
Neither rival is standing still on the product side. AMD’s upcoming Venice EPYC processor is expected to top out at 256 cores, well above Nvidia’s 88-core Vera chip and Intel’s current 128-core Granite Rapids lineup.
Nvidia’s stock jumped 8.7% in the session following its earnings report, adding roughly the value of a mega-cap company to its already sizable market capitalization, The Motley Fool reported.
The server CPU market itself is expected to continue expanding, regardless of which company wins the largest share. AMD has projected the total addressable market could reach $201 billion by 2030 at a 44% compound annual growth rate, leaving room for multiple winners, even if Nvidia’s growth rate outpaces its rivals in the near term, as TheStreet reported.
What this means for chip investors
For Nvidia investors, this is a second revenue line on top of a GPU business that is already pulling away from the field. Customer concentration and China export risks are real concerns. But a CPU business approaching $20 billion this year makes those risks easier to absorb.
For AMD and Intel investors, the dollar figure is not the issue. Both companies still have deeper enterprise relationships and larger installed bases than Nvidia in the CPU market.
The problem is the bundle. When a hyperscaler buys a Rubin rack, Nvidia CPUs come with it. That is how AMD and Intel lose sockets without ever losing a competitive benchmark.
Investors across all three stocks should watch fiscal 2028 guidance closely when it arrives, since Nvidia’s own projection that CPU revenue will more than double next year is the clearest test of whether this threat is accelerating or leveling off.
It will also reveal whether AMD and Intel can defend share fast enough to keep the server CPU market from becoming another Nvidia stronghold.
Related: Jim Cramer has a strong message for Nvidia stock investors
