Nvidia falls, AMD rises—could Arista Networks be the culprit?
On Friday, the stock prices of Nvidia and AMD diverged after Arista Networks' CEO stated during the earnings call that the company is seeing some deployments shift toward AMD.
Nvidia's share price fell nearly 3% intraday on Friday, while AMD rose by almost 1%.
During Thursday evening's earnings call, when asked by analysts about the company's cooperation with AMD, Arista CEO Ullal said: "A year ago, it was basically 99% Nvidia, right? But today, when we look at deployments, about 20%, maybe slightly higher, about 20% to 25% of projects, AMD is becoming the preferred accelerator."
Analysts pointed out that although the share price fluctuations of Nvidia and AMD are not huge, Ullal's comments are significant. Since OpenAI launched ChatGPT more than three years ago and the artificial intelligence industry took off, Nvidia has dominated the AI GPU market.
Currently, Nvidia holds about a 90% share of the AI chip market, with potential challengers including AMD and Google. Google's TPU is also seeing increasing adoption. Nvidia is currently the most valuable company in the United States, with a market capitalization exceeding $4.5 trillion. AMD's market cap is about $335 billion.
Arista’s role in the AI infrastructure wave is to provide Ethernet switching technology for connecting high-performance chips. At the end of last year, AMD announced a partnership with Arista to build customized AI clusters for training and inference.
For Arista, diversification of deployments is largely out of necessity.
Nvidia has reduced the demand for Arista’s technology by building its own networking technologies to connect its powerful GPUs. In October last year, Nvidia announced that Meta and Oracle would adopt Nvidia’s networking technologies in their ecosystems. This news caused Arista's stock price to drop by 10% within two days. One analyst commented: "This isn't the end of the world, but clearly, it would be more advantageous to be designed in by Nvidia, and now they are to some extent being designed out, even if not entirely excluded."
Nvidia launched its Spectrum-X Ethernet platform in 2023. In the following year, Arista’s market value at one point shrank by more than half. The stock rebounded somewhat last year, rising by 19%, and has increased by 6% since 2026.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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