AMD's profit margins have improved sharply, which is good news for AMD shareholders, though the company is still far behind Nvidia.

• AMD's gross margin climbed from roughly 40% to about 54%.
• The company also swung out of a loss and is now making money again.
• Nvidia still holds a much fatter margin, around 75%, and remains the clear leader.
• The gap shows how much pricing power Nvidia keeps in AI chips.

Outlook: AMD's improving profitability makes it a more credible challenger, but closing the gap with Nvidia will take time.