AMD: Possibly Not As Mad As It Looks

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Right. So, AMD. Advanced Micro Devices. The stock’s already had a bit of a run – over 105% in the last year, which, let’s be honest, feels a little breathless. Market cap is currently at $407 billion. Which, when you break it down, is… a lot. Valued at 11.8 times this year’s sales, 36 times earnings. Sounds…optimistic, doesn’t it? I mean, I’m supposed to be spotting value, not chasing bubbles.

But here’s the thing. I’ve been staring at the charts (units of coffee consumed: 7. Hours spent questioning life choices: 4) and I’m starting to think it might not be completely insane. It’s a bit like that dress you think is hideous until someone else wears it and suddenly it’s…interesting. The market, clearly, sees something I initially missed. Or maybe I’m just easily swayed by green candles. It’s possible.

The obvious play is AMD taking market share from Intel in the CPU space. Predictable, really. But the AI thing… that’s where it gets interesting. Everyone’s obsessing over Nvidia and its ultra-high-end GPUs for training these models. But what about actually running them? That’s the bit people seem to be overlooking. It’s like building a fancy sports car but forgetting about the petrol.

Apparently, you don’t need bleeding-edge hardware to make AI work. Less powerful chips can do the job, and they’re a lot cheaper. The margins won’t be as spectacular, obviously. (Ideal margin: 70%. Current reality: considerably lower.) But increased volume could offset that. It’s the “pile it high, sell it cheap” principle, but for artificial intelligence. It feels…slightly less glamorous than I imagined my trading life would be.

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AMD’s AI Potential: 2026 and Beyond

Don’t expect AMD to dethrone Nvidia anytime soon. Nvidia is still the king of the ultra-high-end GPU performance. (Number of times I’ve refreshed the Nvidia stock price today: 17.) But AMD doesn’t need to beat Nvidia. It just needs to carve out a niche. And OpenAI, of all people, is giving them a leg up. They signed a major partnership with AMD last year. Which is…unexpected, to say the least.

Everyone’s scrambling to diversify away from Nvidia. It’s a bit like realizing you’ve put all your eggs in one very expensive, very volatile basket. AMD offers a convenient alternative. And running those AI models – “inference,” apparently – is less hardware intensive. Which means AMD could benefit from the rising demand. It’s a subtle shift, but it could be significant. (Potential for profit: cautiously optimistic. Potential for disaster: always present.)

AMD’s revenue jumped 36% year over year in the last quarter. Gross margin hit 52%. Not bad. Not bad at all. If those AI infrastructure deals start translating into sales and lifting margins, the market’s outlook could change quickly. (Number of times I’ve told myself “this time it’s different”: too many to count.)

So, is AMD a screaming buy? I wouldn’t go that far. But it’s not as mad as it looks. It’s a bit like that slightly eccentric aunt you secretly admire. And in this market, a little bit of eccentricity might just be what you need. (Current emotional state: cautiously hopeful. Level of caffeine in bloodstream: dangerously high.)

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2026-01-23 20:25