Which AI Chip Stocks Have Margin Momentum? Profitability Trend Analysis in Python

June 17, 2026

What's the question?

Artificial intelligence demand has lifted semiconductor revenue, but revenue growth does not tell the whole story. A chip company can grow quickly while losing pricing power, absorbing inventory costs, or spending heavily to support capacity. Margin momentum tests whether the incremental demand is becoming more profitable.

Gross margin is revenue minus cost of revenue, divided by revenue. It measures how much revenue remains after direct production costs. Operating margin goes further by subtracting operating expenses. Free-cash-flow margin measures how much revenue becomes cash after capital spending.

The question is which AI-exposed semiconductor companies are converting demand into better margins, and which are simply growing without additional profitability.

The approach

The universe is NVDA, AVGO, AMD, MU, QCOM, INTC, AMAT, and LRCX. Built from SEC EDGAR public filings and market data, the screen uses annual financial statements to compare the latest fiscal year with the prior fiscal year.

1. Pull annual revenue, gross profit, operating income, and free cash flow
2. Compute latest gross margin, operating margin, and free-cash-flow margin
3. Compute revenue growth from the prior annual period
4. Compute gross-margin change in percentage points
5. Rank companies by gross-margin change

Annual data is used because it smooths quarter-specific shipment timing and makes the comparison more stable across companies with different fiscal calendars.

Code

import xfinlink as xfl
import pandas as pd

xfl.set_api_key("YOUR_API_KEY")  # free at https://xfinlink.com/signup

tickers = ["NVDA", "AVGO", "AMD", "MU", "QCOM", "INTC", "AMAT", "LRCX"]
fields = ["revenue", "gross_profit", "operating_income", "free_cash_flow"]
df = xfl.fundamentals(tickers, period_type="annual", period="5y", fields=fields)

rows = []
for ticker, group in df.sort_values(["ticker", "period_end"]).groupby("ticker"):
    latest = group.dropna(subset=fields).iloc[-1]
    prior = group.dropna(subset=fields).iloc[-2]
    latest_gross_margin = latest["gross_profit"] / latest["revenue"]
    prior_gross_margin = prior["gross_profit"] / prior["revenue"]
    rows.append({
        "ticker": ticker,
        "revenue_growth": latest["revenue"] / prior["revenue"] - 1,
        "gross_margin": latest_gross_margin,
        "gross_margin_change": latest_gross_margin - prior_gross_margin,
        "operating_margin": latest["operating_income"] / latest["revenue"],
        "fcf_margin": latest["free_cash_flow"] / latest["revenue"],
    })

print(pd.DataFrame(rows).sort_values("gross_margin_change", ascending=False))

Full script with formatting and visualisation: ai-chip-margin-momentum-python.py

Output

=== AI Chip Margin Momentum Screen ===
Universe: 8 semiconductor and semiconductor-equipment stocks
Latest annual periods: 2025-06-29 to 2026-01-25
Best gross-margin expansion: MU +17.4pp
Median revenue growth: +23.8%

Margin ranking:
MU    revenue=$37.4B  rev_growth=+48.9%  gross_margin=39.8%  gross_margin_change=+17.4pp  op_margin=26.1%  FCF_margin= 4.5%
AVGO  revenue=$63.9B  rev_growth=+23.9%  gross_margin=67.8%  gross_margin_change= +4.7pp  op_margin=39.9%  FCF_margin=42.1%
INTC  revenue=$52.9B  rev_growth= -0.5%  gross_margin=34.8%  gross_margin_change= +2.1pp  op_margin=-4.2%  FCF_margin=-9.4%
LRCX  revenue=$18.4B  rev_growth=+23.7%  gross_margin=48.7%  gross_margin_change= +1.4pp  op_margin=32.0%  FCF_margin=29.4%
AMAT  revenue=$28.4B  rev_growth= +4.4%  gross_margin=48.7%  gross_margin_change= +1.2pp  op_margin=29.2%  FCF_margin=20.1%
AMD   revenue=$34.6B  rev_growth=+34.3%  gross_margin=49.5%  gross_margin_change= +0.2pp  op_margin=10.7%  FCF_margin=19.4%
QCOM  revenue=$44.3B  rev_growth=+13.7%  gross_margin=55.4%  gross_margin_change= -0.8pp  op_margin=27.9%  FCF_margin=28.9%
NVDA  revenue=$215.9B  rev_growth=+65.5%  gross_margin=71.1%  gross_margin_change= -3.9pp  op_margin=60.4%  FCF_margin=44.8%

What this tells us

MU has the strongest margin momentum in the group. Gross margin expanded by 17.4 percentage points while revenue grew 48.9%. That pattern is consistent with a memory-cycle recovery: revenue accelerates, fixed manufacturing costs are spread over more volume, and pricing improves from depressed levels.

NVDA remains the highest-quality business in absolute terms. It has 65.5% revenue growth, 71.1% gross margin, 60.4% operating margin, and 44.8% free-cash-flow margin. Its gross-margin change is negative because the prior-year margin was already exceptionally high. A decline from an extreme level is different from weak profitability.

INTC is the cautionary case. Gross margin improved by 2.1 percentage points, but revenue fell 0.5%, operating margin was negative, and free-cash-flow margin was negative. Margin improvement without positive operating profitability is not enough to confirm a durable recovery.

So what?

Margin momentum separates cyclical rebound from durable profitability. MU shows the largest improvement, but its free-cash-flow margin is still far below NVDA, AVGO, LRCX, AMAT, and QCOM. NVDA shows the strongest level of profitability, even though its margin change is negative.

For research, the next step is to classify each company by stage. MU is a recovery candidate. NVDA and AVGO are high-margin compounders. INTC is a turnaround that still needs proof in operating income and cash flow. The same AI demand theme can support all three, but each requires a different valuation framework.

Built with xfinlink — free financial data API for Python. pip install xfinlink