Advanced Micro Devices (AMD)

Was hit yesterday after their forecast disappointed and hit today after Musk said he would buy his GPUs from Nvidia, not AMD. AMD remains a solid business with shares up 125% year to date (Nvidia only 17.5%). AMD is run by an amazing CEO.

A very good operator under a fine CEO who has reinvented the company. But the stock is over its skiis at a very high multiple, even compared to Nvidia. Maybe there is innovation driving this euphoria. 

He trimmed it earlier. AMD is a bit tired now. He wanted exposure in hot chips stocks. AMD was much cheaper than Nvidia, and played valuation catch-up.

Announcements have given it a boost. It has blown through its price targets. For example one analyst's price target was $525 and it trades at $565. You could sell some calls.

He's selling some calls (pretty short, 1 week) on this one ; you can get some good premiums on the volatility. You probably don't want to get called away and crystallize your capital gains. So keep an eye on it, and if it keeps going up just roll the strike price up and out.

Last November, the CEO projected that her CPU market would grow 18%, but now it's really 35%. CPUs are their core business. Shares soared over 18% today and enjoyed upgrades. Also, their latest quarter blew away estimates. Shares are up 97% this year. The AI stocks are catching up to overwhelming demand from their customers.

(Note the shortish timeframe.)  Didn't get the full gain, as they have to follow their stop-loss rules. If a stock falls 20%, you either buy more or you sell. A Hold doesn't cut it. Great company. Could take market share from competitors.

Has become a show-me story. Issues with earnings and other ups and downs. Moving above 200-day MA, but NVDA is the better choice.

Be careful of hyperscalers that are spending $100s of billions in capex. Mag 7 has become more of a Lag 7. AI story is very much alive, but how do you play it? See his Top Picks.

Trying to become the credible #2 behind NVDA, and CEO says 2026 will be important in that push. New AI chips are ramping out. Competition will go beyond individual chips to the arena of data centres. Execution story. Fundamentals rank 8/10, analysts are between Buy and Hold. Upside of about 40%.

Challenge is that software ecosystem of NVDA is built around its tools. AMD still has meaningful upside if AI spending continues at the same pace.

She owns NVDA instead, which is the more dominant player. Also owns names like MSFT, AMZN, and GOOG, who are all spending $$ on those chips.

(Note the shortish timeframe.)  We should have done the show yesterday ;)  Chips are commodities now, and commodities are cyclical. If go-forward projections aren't as expected, then the stocks get hit. He probably wouldn't sell today, but has been piecing out his position over the last couple of months.

Really likes it here. Not concerned about competition from NVDA because the market's pretty large. This name works particularly well in partnership with other companies. CPU chips space is starting to turn around, and AMD can take advantage of INTC's struggles.

In her top 10. It's doing very well in GPUs for small language models, less so for large ones. It's taken huge share from Intel and now has 40% of the CPU market. AMD chips requires a lot less memory.