Prediction: These AI Chip Stocks Can Soar in September (Hint: It's Not Nvidia or Broadcom)

Advanced Micro Devices (AMD) and Ambarella are highlighted as key AI chip stocks poised for growth, driven by strong financial performance and strategic product advancements. AMD reported robust Q2 results, with revenue up 32% to $7.7 billion led by data center expansion, and its Instinct MI350 series AI accelerators are now in volume production, offering competitive AI inference performance against Nvidia's B200 at a lower cost, supported by an enhanced ROCm software stack. Concurrently, Ambarella, a key player in edge AI, reported Q2 FY26 revenue up 49.9% to $95.5 million, with edge AI accounting for 80% of sales, as it expands into new markets with its 5nm AI SoCs. Both companies have upcoming investor events in September 2025, serving as near-term catalysts for their respective growth trajectories in the burgeoning AI and HPC markets, despite their current high valuations.

Analysis

Advanced Micro Devices is solidifying its position as a formidable competitor in the AI accelerator market, directly challenging Nvidia's dominance. The company's second-quarter financials were robust, with a 32% year-over-year revenue increase to $7.7 billion and record free cash flow of $1.2 billion, achieved despite an $800 million inventory write-down from U.S. export restrictions on MI308 chips to China. The key growth driver remains the data center segment, where revenue grew 14% to $3.2 billion. Strategically, the ahead-of-schedule volume production of the Instinct MI350 series is a significant development, as its MI355 chips are positioned to match or exceed Nvidia's B200 in AI inference performance at a lower cost, a critical advantage for cost-sensitive data centers. This is complemented by growing adoption, with 7 of the top 10 AI model builders now using Instinct GPUs, and an improved ROCm 7.0 software stack delivering a threefold performance gain. Concurrently, Ambarella is successfully transitioning into a key player in edge AI, which now accounts for 80% of its revenue. Its Q2 FY26 revenue surged 49.9% to $95.5 million, with management guiding for 31-35% growth in fiscal 2026. While both companies trade at high forward multiples—AMD at 42x and Ambarella at 162x—their strong execution, differentiated product roadmaps, and upcoming investor presentations in September 2025 are positioned as near-term positive catalysts.

Key Decisions for Investors

• Investors should monitor AMD's upcoming September investor events for further details on the MI350 series' production ramp and customer traction, as positive updates could validate its premium 42x forward P/E multiple.
• For those with higher risk tolerance, Ambarella offers a targeted high-growth play on edge AI, but its very high 162x forward P/E ratio demands that its execution remains flawless to sustain its guided 31-35% revenue growth.
• Given AMD's reported performance and cost advantages in AI inference with its MI350 series, investors heavily concentrated in Nvidia should assess the growing competitive threat and potential for market share shifts in the data center accelerator space.
• Both stocks carry significant valuation risk; any signs of decelerating growth, weaker-than-expected guidance from management, or negative geopolitical developments concerning export controls could lead to a substantial price correction.