Decline in AI Chip Stocks: How Nvidia and AMD Are Preparing for 2027

While the PHLX Semiconductor Sector index has fallen by 20 percent in the last month, Nvidia shares have declined by 26 percent and AMD shares by 15 percent during this period. Despite the market pressure, both companies continue to present strong growth data.

During this period, in which the PHLX Semiconductor Sector index has declined by 20 percent in the last month, Nvidia shares have lost 26 percent of their value, while AMD shares have lost 15 percent. Despite this contraction in the sector, the companies' activities in the field of artificial intelligence continue.

According to Silicon Analysts data, Nvidia is expected to hold a 75 percent share of the artificial intelligence chip market by the end of 2026. The Vera Rubin systems, which have begun bulk shipments, are projected to account for 20 percent of data center revenue in the third quarter of fiscal year 2027. Furthermore, Nvidia states that these systems offer 10 times higher performance per watt compared to Blackwell processors.

On the AMD side, third-quarter data center revenue increased by 97 percent year-over-year to reach 8.5 billion dollars. While the data center segment accounted for 64 percent of the company's revenue last quarter, AMD is expected to generate more than 80 percent of its total revenue from this segment in 2027.

According to analysts' 12-month price targets, Nvidia offers a potential upside of 88 percent with a median price target of 318 dollars, while AMD's projected 12-month earnings growth is at the 26 percent level. According to assessments, while Nvidia offers an attractive valuation and higher potential earnings, it is projected that AMD's earnings per share growth will accelerate.