AMD Gains as Intel Faces Supply and Competitiveness Challenges
"Now, for AMD, they just uh for Intel, they just reported earnings. And the reason I want to talk about them is because they did share a lot of great insight for what AMD investors should know. So, in forms of the bullish things, the transcript contains bullish signals for AMD, primarily centered on Intel's severe supply constraints, uncompetitive data center products, and poor profits on new products, which creates a massive immediate opportunity for AMD to continue to take market share. First, Intel states that they cannot meet demand for their products, particularly on older nodes, leaving an open door for AMD's Ryzen and Epic products."
The speaker highlights Intel's recent earnings as a backdrop for AMD's competitive advantage. Intel's admission of supply constraints and uncompetitive data center offerings is positioned as a catalyst for AMD to capture market share in both the server and mainstream PC segments, reinforcing a bullish outlook for AMD.
AMD Valuation and Earnings Growth Catalysts
"Next, I want to take a closer look at AMD's forward PE ratio, and it's currently at 50, where the median is roughly 32.78. Now, this seems pretty high and some investors might say, "Jose, this is looking a lot like January 2024 when we saw the stock and we can actually even look at the past five years." January is when the stock started going up like crazy and you kind of peaked and then you saw this massive downturn, right? So, some investors were saying, "Look, it's starting to look like this again where you're just having crazy valuations and then what's going to happen is you're going to have a massive, massive pullback." But I think there is a big difference right now. Right now AMD stock has seen a massive run up because of two things. First is obviously the OpenAI deal. The second, in my opinion, is that massive order from Oracle. I would say it's a little bit different here than where we were in January of 2024 because this runup actually has a probability to see massive growth in earnings. I mean, Lisa Sue mentioned with the OpenAI deal that you can expect billions of dollars and both accredited to earnings with these recent deals with OpenAI."
The speaker reviews AMD's high forward PE ratio relative to its historical benchmark and explains that unlike previous high-valuation periods, the current run-up is driven by significant catalysts, including an OpenAI deal and a large Oracle order. These factors are expected to drive earnings growth and narrow valuations in the near future.
AMD Strategic AI Partnership and Buy Signal
"Next up is AMD. AMD has been an absolute runner and is cheaper than Nvidia on a valuation basis, making it a very strong buy right now for continued momentum. The company recently announced a multigenerational strategic agreement with OpenAI, deploying 6 gigawatts of AMD GPU power starting with the Instinct Mi450 series. This non-exclusive deal places AMD firmly inside the AI ecosystem, and with AIGPU demand already sold out through 2025, there is significant upside potential. I think AMD is poised for a substantial revenue boost in 2026, making it a compelling pick."
The speaker highlights AMD's strategic AI partnership with OpenAI and competitive valuation compared to Nvidia, calling it a strong buy for its potential revenue acceleration and expanded role in the AI ecosystem.
AMD's Progress and OpenAI Deal Implications
"I mean, we’ve been talking about AMD at $100 for the last couple of months and now they’re getting the recognition they deserve with major shipments of MI450 orders announced by Oracle. On one hand, the OpenAI-related deal offers up to a 10% equity play if targets are met, with potential milestones culminating at a $600 valuation threshold. While this deal isn’t going to send AMD to a trillion overnight, the jump in investor sentiment following these announcements is clear. It’s exciting to see AMD being acknowledged on the inference and software sides as well."
The panel highlights AMD’s recent catalysts, including MI450 shipments and the OpenAI-related equity arrangement. Although price targets like a $600 milestone are discussed, the overall tone remains cautiously optimistic, driven by both product recognition and evolving software capabilities.
Potential Buy on AMD Pullback
"I think the entire space is going to continue to climb. Um, if you're looking for a price, maybe if it pulls back to 212-220, that would be an area I would like to potentially get in. Um, if they do have a pullback, maybe halfway through next month, they could pull back."
The speaker expresses a bullish view on AMD, suggesting that a dip to the 212-220 price range would be an attractive entry point. This actionable trade idea is based on the expectation that AMD will continue its upward trend, making it a potential short-term buy opportunity.
Bullish AMD Trade Call via Dollar Cost Averaging
"So, I am getting very very excited about the stock. For me though, right now it is more of a dollar cost average opposed to loading the boat. Regardless, I think AMD in the long term of things in the next few years has a map laid out, not a guarantee, but a map layout to hit a trillion dollar company that's still a three bagger from here. This is coming from someone who's bullish on AMD and it's been bullish for a very long time. This is already a multi multibagger for me. But again, the market gives us opportunity. So, I wouldn't rush all at once."
The host expresses strong bullish sentiment on AMD, highlighting its long-term growth potential as a multi-multibagger and even a trillion-dollar company. He advises a dollar cost averaging approach rather than lump-sum buying, suggesting caution while remaining optimistic about future gains.
Bullish AMD deal from Oracle signals AI momentum
"I mean, I'm always looking at the chip stock. So, AMD advanced micro devices top on my list. Um, it had a big jump on Wednesday, up 9% that closed at a record high. It was uh after earlier in the week, so on Tuesday, it landed a major deal from Oracle."
The speaker highlights AMD's recent performance, noting a 9% jump and a record close following a major deal with Oracle. This deal is seen as a catalyst in AMD's effort to challenge Nvidia in the AI processor market, particularly as Oracle plans to deploy its chips in data centers.
Bullish Trade Call on AMD Due to Oracle GPU Order
"The biggest news is actually something happening with AMD. So AMD was pretty happy earlier today after a pullback, and Oracle announced a massive initial deployment of AMD's MI450 series GPUs with an order for 50,000 units starting in Q3 of 2026 and expanding into 2027. I do believe AMD is on its way to be a trillion dollar company in the next five years owing to this rack scale solution that integrates CPU, GPU, and other components to drive revenue per system. This order, along with the momentum from previous partnerships, makes the future revenue potential look underestimated by current analyst estimates."
The speaker highlights a significant deployment order from Oracle for AMD MI450 GPUs, viewing it as a major catalyst for AMD. This endorsement is backed by the potential to drive integrated revenue and a long-term vision of AMD reaching trillion-dollar market value, making it an attractive buying opportunity.
Bullish Commentary on AMD Amid Oracle's Chip Deployment
"Oracle will be deploying AMD's latest artificial intelligence chips to build out a new supercluster to help customers run larger, more complex AI models in the second half of next year. I spoke to a number of Oracle cloud executives on why they decided to partner with AMD this time over Nvidia and here's what they had to say about why they see AMD as the right choice for inference. I think with AMD, we've been working for so long with them that their software stack is really, really critical. That statement is very bullish for AMD overall and a real vote of confidence in their competitive positioning in the AI ecosystem."
The speaker highlights Oracle's decision to deploy AMD chips as a strong positive catalyst for AMD. He emphasizes the importance of AMD's software stack and its competitive positioning against Nvidia, suggesting a bullish outlook for AMD as it benefits from increased deployments and potential margin expansion.
Cautionary Commentary on AMD's Open AI Exposure
"Yeah, well, AMD just had to deal with open AI. >> Yeah, >> that's a whole different discussion. I probably should have included a graphic that's been floating around showing the relationship Open AI has with Nvidia, with AMD, with uh uh Coreave and many other companies. And this money is just circulating back and forth. And it's healthy in one respect because everyone is helping fund each other meet these goals, but it also creates an Achilles uh heel in, in, you know, a potential big problem. If one of those bigger companies fails, what does that mean for all the other companies? What if Open AI can't be competitive? What if they just can't produce revenue? So, so it's potentially a problem in AI, but for now it's like AMD is what up 30 almost 40%."
Michael discusses the interconnected exposure between technology players, noting that while AMD has rallied 30-40% following its Open AI developments, the revolving fund structure among companies like Nvidia, AMD, and others could create vulnerabilities. He warns that if Open AI fails to generate competitive revenue, the ripple effects could impact these larger companies.