Nvidia's stock is down and AMD is up. The culprit may be Arista.

On Friday, the stock trajectories of Nvidia and Advanced Micro Devices (AMD) diverged sharply, influenced by insights from Arista Networks' CEO. The executive revealed during an earnings call that Arista is witnessing a notable shift in deployment preferences, with AMD gaining traction. As a result, Nvidia's shares dipped nearly 3%, while AMD saw a modest increase of about 1%. Ullal, the CEO of Arista, highlighted a substantial change in the company’s deployment landscape compared to a year ago, stating, "A year ago, it was pretty much 99% Nvidia, right? Today, when we look at our deployments, we see about 20%, maybe a little more, 20% to 25%, where AMD is becoming the preferred accelerator of choice." Although the fluctuations in stock prices were not extreme, Ullal's remarks carry significant weight, especially considering Nvidia's longstanding dominance in the graphics processing unit (GPU) market since the AI boom began with the launch of OpenAI's ChatGPT over three years ago. Currently, Nvidia commands approximately 90% of the AI chip market, but faces emerging competition from AMD and Google, which is gaining momentum with its tensor processing units. Nvidia retains its status as the most valuable company in the U.S., boasting a market capitalization exceeding $4.5 trillion, while AMD's value has surged to around $335 billion following an impressive 85% rise in its stock over the past year. Arista plays a crucial role in the expanding AI infrastructure by providing the Ethernet switching technology essential for connecting high-performance chips. Last year, AMD announced a collaboration with Arista to develop customized AI clusters aimed at enhancing both training and inference capabilities. However, Arista's pivot towards AMD is partly driven by Nvidia's strategic advancements. Nvidia has lessened its reliance on Arista's technology by developing its own networking solutions for linking GPUs. This shift was underscored in October when Nvidia revealed that major players like Meta and Oracle would integrate its networking technology, contributing to a 10% decline in Arista's stock over two days. Industry analyst Ben Bajarin noted, "It's not the end of the world but obviously being designed in with Nvidia helps, and they are being designed out, if not fully, to a degree." Nvidia's introduction of its Spectrum-X Ethernet platform in 2023 further complicated matters for Arista, which saw its stock lose more than half its value shortly thereafter. While the stock rebounded with a 19% increase last year, it is currently up 6% in 2026. Requests for comments from Nvidia and AMD went unanswered.