The Market Is Wrong About AMD - Buy The Dip.

All right, what's up everybody and welcome back to another Wednesday here in the stock market. Well, I'm sure many of you have already seen what happened yesterday as AMD's price absolutely cratered following their Q2 2026 earnings report. I mean, it was fast. It was fast. We were on live stream watching it and this thing did all of this within the span of like 30 seconds. It was insane. We saw AMD fall from $532 all the way down to $463, a price drop of $70 or 13% again in the span of seconds. It was a wild wild pullback following their earnings report. Now, this of course has caused a lot of worry here in the market. This has caused a lot of maybe panic, especially within the AMD community. And although I do understand why, I'm going to be honest with you. I think people are getting this one wrong. I know it feels scary and I know it looks scary to see a big red candle like that, but I do genuinely believe that people are getting this wrong when it comes to the reasons as to why AMD pulled back. And I do think this is going to create an opportunity for the people who are willing to stand through this bit of a rougher time in the AMD price period. Okay? And so with that in mind, in today's video, I'm going to walk you through everything. Okay? In today's video, we are first and foremost going to go into why it's falling as there are three different reasons that the market is absorbing right now. Then I'm going to talk about why I don't agree with any of them. Okay, so I have a bit of a controversial take here. I don't really agree with any of these reasons in the sense that it justifies a pullback of this nature. Makes sense in a little bit here. And then I'm going to talk about why this could be a dip buying opportunity, why I may actually be going in and deploying funds into some sort of long trade on AMD, especially if it continues down. So we have a good bit to get into today. I will remind you all though later today there's more earnings coming up. There are some big ones, especially SanDisk, which is a memory play here in the AI trade. I am going to be live for that. I'll be going live from like 3:00 p.m. Eastern to 4:30, 5:00 Eastern. Depends on how how long the earnings calls go. So, make sure you're there for that. We've been trying to do earnings calls live streams all week. So, make sure you're there for that. And if you have been enjoying them, like the video. But with that in mind, let's first and foremost jump into why it's following. Let's get into the three reasons. So, reason number one was the numbers. The numbers that they reported were great, but they were not good enough. I'll talk about all of these individually in a second. The second reason was the capex raise. They decided to spend a lot more money than the market was expecting. Market doesn't like that. It was about triple. It was a pretty big pretty big change. Okay. The third reason was the SpaceX headline. SpaceX came out and said that they weren't no longer going to be buying AMD products. They were going to be going full in to Nvidia. And that is actually why you saw Nvidia performing decently well afterwards as well. You can see that Nvidia started to kind of push upwards when AMD started to pull back. um it was because of that news. So, let's just kind of dive into each one of these reasons as to why AMD's price pulled back and then I'll separately and individually go into why I disagree with each one of them. I'll quote unquote debunk them. Okay, so the first one, the numbers. When it comes to the numbers that AMD reported yesterday, um they beat across the board. Revenue 11.54 billion is what they reported. Expectations were 11.3 billion. That's a beat. Earnings per share was $166. They beat expectations of $161. Data center revenue came in at 6.7 billion. Analysts were expecting 6.5 billion. The Q3 guidance was 13 billion. Expectations were 12.6 billion. So whenever you look at each one of these numbers respectively, they beat across the board. But when I made the get ready for the AMD earnings video for you all yesterday, I told you all something. I said, listen to me very closely. Although these are the numbers that analysts are expecting and AMD is probably going to beat them one way or another, just beating them a little bit won't be good enough. I told you. I said the market's going to want to see them put in 12 billion of revenue, $1.70 EPS, 7 billion data center revenue, and guide 13.5 to 14 billion. It's going to need to be a substantial beat because you have to remember earlier this week, Palanteer absolutely blew their earnings out of the water. Last week, Hyperscalers blew their earnings out of the water. So, the market was pricing in that AMD was going to go nuts. That AMD was going to see some crazy crazy numbers. And I told you that's why, you know, AMD's price was pumping going into earnings. it was expecting something absolutely phenomenal and although this was good it it just wasn't great. It wasn't exceptional and that's what the market wanted and that's what the market was pricing in. Hence the reason why the price started to pull back. Now in addition to that the second reason is that their spending nearly tripled. AMD's capex jumped to 88 million up from just 282 million a year ago and 389 million last quarter. So a triple year-over-year and over a double quarter over quarter and that was way above forecast. And not going to lie, it scared the market. Like this was this was one of the more ones that I'm like, "Yeah, that's kind of justifiably a little bit worrying." Especially when you read the headline. When you dive into it a little bit deeper, you go, "Oh, that's not nearly as bad. That'll be I'll talk about that in a second." But yeah, it did scare the market because it was again way above forecast. And think about the timing. Just think about the timing. For the last few months, any company, any company whatsoever that raised their capex and started jumping up their capex, the market absolutely punished. Think about things like Amazon. Think about even something like SpaceX for example. Any of these companies that are raising their capex. Google's another great example. Um yeah, they they've seen their prices get punished. Now Amazon was a little bit different, right? Amazon went up recently as a result, but think about the times before that. You know what I mean? And so overall, whenever the market saw this whole capex raise situation, 88 million, and immediately freaked out and started selling off AMD. And the very last reason was because they lost a customer. Um, on the same evening, which was again yesterday, SpaceX had its first earnings call and Elon Musk said that they would use Nvidia for its future AI chips instead of AMD. So, all you're going to see is people say, "Oh my goodness, SpaceX, one of the biggest companies in the world, decided that AMD wasn't good enough and that they were going to be going in with Nvidia." And that's just one more scary headline at the worst possible moment when you already had these things making people a bit concerned. You mix all of these things together and yeah, you get a crash like it got yesterday. you end up seeing a pullback of this scale, of this size, in which the 18th largest company in the world can fall [clears throat] 13% over the span of just minutes. You know, on the surface it looks fine. On the surface, you go, "Yeah, I mean, that makes sense." But realistically, when you start to break these things down and we look at these three things individually for what they actually are, you come to realize that although none of these things sound good, which could justify a bit of a pullback, none of these things are so bad that they justify a massive crash. And it mostly comes down to emotion. Let me go into the first one being the numbers. So, when it comes to the numbers, the numbers are actually excellent. And what I want you to do is I want you to just take a step back from the expectations game. take a step back from the AI trade and looking comparing it to hyperscalers and comparing it to Palanteer and just look at it for what they've done. It was a fantastic earnings report. Their revenue is climbing out out in an outstanding way. Their margins are maintaining 56% beating some analysts expectations of 54% for gross margins. 56% on a company whose margins or 56% margins on a company who's growing like this is phenomenal. Especially considering their capital expenditure is climbing yet their margins are still hitting expectations and staying elevated. It's a fantastic earnings report. And when you consider the fact that you know revenue is up 50% to a record, data center more than doubled to 58% of the company's earnings and they're raising their guidance. while Lisa Sue goes on the on the call and said that server revenue grows 80% in the second half and Q4 goes even higher. It makes you go oh these are really good numbers and the numbers were never really the problem. It was the expectation in the world of AI in the AI trade this is a very highly volatile highly emotional and highly leveraged market and so it's pricing in absolute perfection and then some every single earnings report and it's the reason why a company like Micron can beat across the board and end up falling. It's the reason why a company like AMD can beat across the board and end up falling. It's the reason why Google can beat across the board, raise their capex a little bit and end up falling. It's because this market is it wants everything to go exactly how they want it. And so you start to in you know you start to inject these little moments where something doesn't go exactly its way and it causes this big huge reaction. And the same thing goes for capex. Okay, this whole capex spending thing that people are comparing it to hyperscalers and they say why would you raise your capex? You saw what happened to Google when they raised their capex. It's not the same thing. It's not the same thing. A AMD is fabulous. They're not building billiondoll factories and data centers. That is not what they were doing. The money is actually being used for securing scarce HBM memory and building capacity and to ship MI400 and Helios. So what they're doing is they're spending ahead of demand that they've already booked. Remember these these AMD is selling to multi-gawatt Open AI, Meta Deal, Microsoft Azure deal. These are investments into this ramp that they're projecting moving forward. This is not them building some sort of data center and inject injecting tens, hundreds of billions of dollars into building these factories and hoping that no, that's not what this is. They already have demand for these MI350, MI400, MI450 chips. They're shipping them. They just need a lot of memory. Now, can that cause a little bit of concern when it comes to future um profit margins? Sure. And if that's the narrative that people want to paint, I can agree with that. But the fact that people are tripping out about them just spending more money in general. I'm like, listen, whenever you have to build in and you're delivering a premium product that's based on scarce components, naturally, you're going to have to spend more money over time, but their margins are maintaining very well and their revenue is growing. So, it's not that big a deal. People just don't like the word capex. But people don't understand that every single company in the world has capital expenditure. It's not just limited to hyperscalers. Okay. Nonetheless, the final thing, SpaceX. Let's get into this because it it's it's one of those one this is one of the ones that actually kind of gets under my skin of skin a bit because SpaceX was never a real AI customer. Let me just let me just be honest. I'm just going to go ahead and put it out there and this is the weakest argument of all of them. SpaceX and XAI's AI clusters were always built on Nvidia. And Musk has a well-known Nvidia relationship. SpaceX was never a meaningful buyer of AMD's chips like the market's making it out to be. Everyone's saying, "Oh my god, they lost a mass buyer." I know they didn't. Go look at the numbers. I don't want to dive into all the numbers right now because this video is getting a little bit long already, but go look at the numbers. Sure, small buys here and there. Look at the percentage share of their revenue that was SpaceX compared to everyone else. It's an accounting it's an accounting error, right? It's the headline that people don't like. It's the headline that people don't like that, oh my goodness, they lost a major company. But in reality, if you go look at how this is going to impact their profit, it won't. It really won't. All right. Meanwhile, the customers that actually matter, OpenAI, Meta, Microsoft, Oracle, Anthropic, when it comes to Helios, they were all reaffirmed on the call. They are growing even more. Look at the announcement that Microsoft just had with Azure and AMD powering Helios. Massive, massive. Using Helios, it's massive. So, losing a tiny customer while keeping that roster is not the story and it's not good enough. And so, when you start to put all of these thing, these three things together, sure. Does that make me go? Yeah, a little bit of a correction totally fine. Maybe even erasing all of yesterday's gains, which is basically what happened, right? Which is B. We went a little bit below a couple percentage points before. Sure. But does it justify AMD going on some sort of continued pullback to the downside? Oh, no. I can't get behind that. And I would call that a full-blown a full-blown overreaction. And so my thought process is honestly if AMD decides to continue this trajectory downwards, if the momentum from AMD is truly gone and we're going to see AMD start heading back towards these lower levels, let's say AMD starts coming back down into the macro golden zone below it between 459 to 441 and it breaks through this. Let's say it falls through this and continues down to say 419, 393, or 362. If it goes on some sort of continued pullback into these levels, guys, I'm accumulating. I'm going in on this thing because look what's happening to the HCI already. Look, let me show you daily chart TH toolkit. Look, your HCI was at a minus one before that candle started. We're going to wake up today and your daily HCI is going to be minus2 to minus3. It's going to be somewhere in here. Meaning that AMD would have seen a beautiful reset, a beautiful reset on its HCI. And remember how this tool works. This is the tool that I developed. When the price goes up, the meter goes up. And when the meter goes into the red zone, it means the price is getting too high and it's probably going to see a sell-off or a cool down soon. When the price goes down and the meter falls into the green zone, it means that the price is getting too low and could easily see a reversal sometime soon. You see how it was green right here and green right here before the reversal, it's going to be green again as AMD starts to roll. And if it for some reason starts coming back down to $400 or below, even the low 400s, that meter is going to be pinging 3 - 3.5 -4 - 4.5, maybe even getting close to -5. Probably not all the way down there. And guess what? That is going to be my signal. That's going to be my trigger. And I am going to be going in and adding AMD to the portfolio because I just don't agree that this is some terrible piece of news that justifies a crash. I don't agree. I just simply I simply just do not agree. And maybe maybe I'll be wrong. Maybe AMD is just going to crash and crash and crash and crash. I don't see it. What I think would be more likely is that if it does continue this trajectory, maybe it comes back down into this buy zone, maybe continues a bit lower, tries to stabilize out a little bit, and then goes on some sort of continuation upwards. I still think AMD is going to give you an all-time high. And so I would be willing to accumulate in some sort of further dip if that is what is going to happen. Okay. So I'll keep you updated, but I'll be watching the HCI exclusively. If this HCI starts dipping into -3 -4 -5 territory as we're approaching this buyer zone here, that is when I'm going to do my buying and I'll keep you updated. And don't forget guys, this toolkit that I'm looking at right now, this is my personal toolkit. You can kind of just turn it on and off and it does your technical analysis for you. It'll tell you where the sellers are. It'll tell you where the buyers are. It'll tell you if the price is getting too high. It'll tell you if the price is getting a bit too low. This is my personal toolkit. I like it cuz literally I can just turn it on and off and do my analysis instantly. If you want to check it out, the link is down below. I'm turning off that discount code today. Later today. I gave a 10% discount code. It was toolkit. T O L K I T. I'm turning that off later today. So, scoop it up if you want it. Okay. So, that'll be what I'm doing. I will be going in and accumulating here. I'm not exactly sure where I'm going to do it. I may either do it in the new hyperscalers portfolio, which would make a ton of sense. I also may do it as a long trade. I may just go open up a 3x to 5x um long trade on AMD over on liquid.trade and just go from there. Um but I'm not sure yet. I'll keep you updated. Maybe check the live stream later. I'll let you know if I decide to make a move. It all depends on what AMD does today. So again, I'll let you know. Now, speaking of later today, just kind of moving along a little bit here. I will remind you all there are some big big earnings later tonight. I think we have a couple like Uber, we have a couple like Disney, McDonald's, I believe, and SanDisk. And SanDisk is a major major player in the semiconductor space as well. The market's going to be paying attention. So, I am going to be live for that between again about 3:00 p.m. Eastern Standard or maybe 3:30 EST and pushing into like 4:30 5:00 EST. All right? So, it'll be 2 2 and 1 half hours if I had to guess. So, make sure you're there for that. If you have been enjoying the content, always guys, always just all I ask like the video down below. Don't forget today is your last day to go grab the toolkit with the 10% discount. I have no idea the next time I'll do a discount like that. So, please do check it out if that's something that's interesting to you. And I can't wait to see you all in a video. And let me know, by the way, if you agree or disagree about that, my perspective on AMD, let me know in the comments.