For years, Nvidia has been the clear leader in AI computing hardware, leaving most competitors especially Advanced Micro Devices (AMD) far behind. But things are beginning to change. AMD is making several improvements, forming strategic partnerships, and targeting new markets that could help it gain momentum in the next few years.

At the same time, some analysts worry about a potential AI market bubble. So the big question remains: Is AMD too late, or could 2026 be the year it finally becomes a real AI contender?

AMD Is Upgrading the Weakest Part of Its AI Offering

One key reason Nvidia has stayed ahead is not just its GPUs but its software ecosystem and supporting hardware. Nvidia’s software tools have been easier for developers and AI companies to use, which kept AMD on the sidelines.

However, AMD has been working to close this gap.

ROCm Software Has Improved

AMD’s acquisition of Nod.ai has significantly strengthened its ROCm software platform. According to AMD, ROCm downloads increased 10× year over year, showing clear developer interest and improved usability.

Partnership With OpenAI

In October, OpenAI and AMD announced a major collaboration:

• AMD will supply 6 gigawatts of computing power
• Both companies will work together on software controls, another boost to AMD’s ecosystem

This partnership is important because it suggests that OpenAI, one of the biggest names in AI, sees AMD as a viable long-term partner.

China Could Be a Game-Changer for AMD

Currently, both AMD and Nvidia are restricted from exporting advanced chips to China due to U.S. regulations. But AMD’s CEO, Lisa Su, has stated that the company is willing to pay a 15% export tax to sell a modified version, the MI308 AI chip to China.

This version is slightly downgraded from the U.S. model but could still serve China’s rapidly growing AI market.

If the U.S. government, under the Trump administration, approves this plan, AMD could gain access to one of the largest AI markets in the world, something that has major revenue potential. A decision is expected sometime in 2026, and a positive outcome could lift AMD’s stock.

Cost Advantage Could Attract Budget-Conscious AI Buyers

Another factor working in AMD’s favor is pricing.
AMD’s chips are typically cheaper than Nvidia’s, which could matter as companies begin tightening budgets after years of heavy AI spending.

Although Nvidia’s performance advantage is real and is why it charges a premium, some AI hyperscalers may eventually turn to lower-cost solutions if return on investment becomes more important. A shift in sentiment like this could strengthen AMD’s position in 2026.

AMD’s Growth Forecast Looks Ambitious

During its financial analyst day, AMD projected extremely strong growth in the coming years suggesting management is confident about the company’s AI opportunities.

Data Center Revenue Expectations

AMD expects:

• 60% compound annual growth (CAGR) in data center revenue through 2030
• Compared to the 22% growth in Q3, this would require a big improvement in market share and AI adoption

Reaching that number would likely require many AI providers to adopt AMD’s technology stack, something that is possible but not guaranteed.

Other Business Segments Still Matter

AMD is not only an AI chip company.
Its other divisions gaming, OEM computing, and embedded processors are expected to grow at around 10% CAGR over the next five years.

This brings AMD’s overall revenue forecast to about 35% CAGR through 2030, which is still very strong for a company of its size.

If AMD gets anywhere near this pace in 2026, investors may start seeing AMD as one of the key winners in the AI revolution.

So, Could AMD Be an AI Winner in 2026?

Based on current trends software improvements, partnerships, pricing advantages, and potential access to China, AMD has several positive forces working in its favor. But whether it becomes a true AI leader depends heavily on:

• How much market share it gains from Nvidia
• Whether AI giants adopt AMD’s ecosystem
• The outcome of U.S. export regulations
• How fast the global AI market grows

AMD has momentum, but it still has a long climb ahead.

Disclaimer

This article is for informational purposes only and does not constitute financial advice, investment guidance, or stock recommendations. Always conduct your own research or consult a licensed financial professional before making investment decisions.