AMD just delivered its best quarter ever - and got punished for it. The company posted record revenue of $10.3 billion, beat earnings estimates by 16%, and grew data center sales 39%. The stock cratered 17% the next day - its worst drop since 2017.
The issue? Guidance. AMD expects $9.8 billion next quarter, above consensus, but not the blowout number AI bulls were hoping for. There’s also a China problem - AMD sold $390 million of AI chips to China in Q4, but new export controls will slash that to just $100 million this quarter.
The stock now trades at 75x trailing earnings but just 30x forward - if AMD hits its targets. Lisa Su says 7 of the top 10 AI companies now use AMD chips. Nvidia still owns 85% of the AI GPU market, but AMD is the clear #2 and growing.
Is this the dip to buy on the best Nvidia alternative? Or proof that even record results can’t justify the valuation?
Here's how the community voted
Nvidia’s best alternative - 7 of the top 10 AI companies now use AMD chips. They’re significantly cheaper, and with Nvidia “sold out,” customers are turning to the only credible alternative.
Data center is booming - $16.6B in revenue last year, up 32%. While gaming struggles, AI and server chips are now the core of AMD’s business - and growing fast.
The selloff looks overdone - Stock dropped 17% after beating expectations. If AMD hits its targets, the valuation looks much more reasonable. Analysts still see 30%+ upside.
Nvidia’s moat is massive - 85% market share vs AMD’s 7%. Nvidia’s software ecosystem is years ahead, and developers are locked in. Being the cheaper #2 may not be enough to break that grip.
Custom silicon is the bigger threat - Google, Amazon, and Microsoft are all building their own AI chips. The tech giants AMD is courting may not need a Nvidia alternative - they’re making their own.
Data center is carrying everything - Gaming and client segments combined are now smaller than data center alone. If AI demand slows, there’s no backup plan.
Nvidia’s best alternative - 7 of the top 10 AI companies now use AMD chips. They’re significantly cheaper, and with Nvidia “sold out,” customers are turning to the only credible alternative.
Data center is booming - $16.6B in revenue last year, up 32%. While gaming struggles, AI and server chips are now the core of AMD’s business - and growing fast.
The selloff looks overdone - Stock dropped 17% after beating expectations. If AMD hits its targets, the valuation looks much more reasonable. Analysts still see 30%+ upside.
Nvidia’s moat is massive - 85% market share vs AMD’s 7%. Nvidia’s software ecosystem is years ahead, and developers are locked in. Being the cheaper #2 may not be enough to break that grip.
Custom silicon is the bigger threat - Google, Amazon, and Microsoft are all building their own AI chips. The tech giants AMD is courting may not need a Nvidia alternative - they’re making their own.
Data center is carrying everything - Gaming and client segments combined are now smaller than data center alone. If AI demand slows, there’s no backup plan.
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Good company IMHO. Don't think the whiplash would be as bad here as others if the AI capex boom suddenly stops. Traditional chips & data center needs are not going to evaporate overnight. Plenty of room for growth. I'm not sure the extent to which msft, alphabet etc will license their chips out? Assuming they don't and use these for their own cloud investments, then for everyone else in the world, sourcing traditional chips will continue to have a limited number of players.