News about AMD

U.S. chip stocks rebounded over the weekend after their worst week since March, as investors repositioned ahead of third-quarter earnings from Tesla, Netflix and Meta. Intel and AMD each rose about 2.6% in overnight trading, while Micron and SanDisk gained 1.8% and 2.6%, and the iShares Semiconductor ETF (SOXX) rose 2.4% after an 11.8% drop the previous week. In a Nikkei interview, Intel CEO Lip-Bu Tan said the company was “80% done” with its restructuring and pointed to AI chip packaging and ASICs as growth areas. Intel also unveiled its GPU D-series with up to 480GB of memory, which according to TechRadar surpasses the 288GB of Nvidia's Blackwell Ultra B300 for data center GPU memory capacity. Stocktwits sentiment was bullish on SOXX, bearish on INTC, neutral on AMD and bullish on MU and SNDK, while one trader warned of possible further downside before a bounce and advised caution with long positions until last week's high is broken.

AMD shares have sold off recently, even though the company has benefited from an AI chip shortage because Nvidia cannot meet all demand. The article argues that valuation is a bigger risk than the AI business, with AMD's P/E at 139 and forward P/E at 72, several times higher than Nvidia, Broadcom and Taiwan Semiconductor. If AMD's P/E fell to Nvidia's current level, the stock could lose close to 80% of its value. Still, the valuation is seen as more of a threat to the stock than to the company, since data center AI chips made up 58% of AMD's latest-quarter revenue versus almost 93% for Nvidia. The author reduced AMD holdings for diversification but kept a substantial long-term position.

With US inflation at 3.7% in September, driven by higher energy costs, the article highlights three fast-growing, financially sound stocks from a screener. NVIDIA's Compute & Networking unit, which supplies GPUs and AI software to cloud and enterprise customers, generates about US$275.4b, versus US$27.6b from Graphics, and the company has a market value of roughly US$5,170.6b. The article says its margins could be undermined if a cheaper or more open alternative to CUDA gains uptake. AMD's Data Center business, serving hyperscale clouds with EPYC and Instinct chips, sits within a company valued near US$863.2b, and it has Helios AI system commitments from OpenAI, Meta and Anthropic. USA Rare Earth, an early-stage producer valued at about US$4b, focuses on rare earth minerals for electric vehicles and clean energy, and received a DOE award for a pilot-scale separations project in the US.