AMD on a tear

What is there to say about AMD except for holy moly it has been on a rocket ship since the April lows. As discussed in previous posts I started buying near the lows and hav rode it all of the way buying more shares along the way. Full transparency I have a bit of an itch to buy more but I have not fully made up my mind as of yet.

By comparison since the April bottom:

• AMD is up 113%
• NVDA is up 84%

This is the first stock that I have owned that had its sentiment switch so rapidly. Now it seems that every once a piece and can’t talk enough about MI350 and then MI400 coming out next year if I recall correctly. I have to say its been a great feeling.

Part of the acceleration has been the U.S. allowing certain chips such as the MI308 chips to be sold to China once again which is absolutely massive for the stock. China is about 10-15% of AI spending. Funnily enough the news first broke talking about NVDA chips only but it also applied to AMD and other manufacturers. I think we owe this, at least in part, to Jensen (NVDA’s CEO) speaking at the White House.

Other drivers I believe contributed to this are:

• NVDA hitting 4 trillion
• Large players continuing to expand like Meta announcing huge AI builds like the 2 gigawatt prometheus
  • They are considering spending 100s of billions on this which is the current market cap of AMD so even a small 10% coming from AMD would be huge

Long term I believe AMD should be able to narrow the gap between itself and NVDA. At current market valuation AMD is only 1/16th the size. (4230 Billion vs 270 Billion). If I had to predict I would say that AMD has a great chance at reaching the 1 trillion mark over the next couple of years if not sooner. Idea here is that it could be 1/5th the market cap of NVDA.

Conference call is coming up on August 5th and I am expecting a killer quarter with extremely bullish outlook easily pushing us up another 5% or $175 per share. It could even happen before then but, I don’t want to get too greedy.

Before I wrap up here it is important for me to say that I realize we are in an euphoric state and riding the momentum hard. Also the party can end extremely fast and easily drop 50%. Currently I am up 50% and I believe the party is far from over so I plan to hold. Now if I am wrong AMD is only 1-2% of my total portfolio so no worries.

Summary

AMD has surged 113% since April’s lows, outpacing even NVIDIA’s rally (yes if you zoom out NVDA is winning hands down). I’ve been riding the wave since near the bottom and might even add more. Key catalysts include relaxed U.S.-China chip restrictions, massive AI infrastructure spending, and a shift in sentiment toward AMD’s MI chips. While the stock’s rise feels euphoric, I’m holding for now staying confident but cautious with my position size.

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