AMD Earnings Are 48 Hours Away — Here’s Why I’m Excited

Hey guys, welcome back to another episode of What the Chip Happened. What I believe is the greatest AI and semiconductor news. Today I want to take a closer look at a company you are all very familiar with, Advanced Micro Devices, ticker AMD. But are you prepared for earnings later this week on today's episode? That's exactly what I want to touch. I want to take a closer look at everything I am keeping a closer eye on from their CPU market, from their GPU market, from a new kind of deal that they just mentioned. But before we get started, I also want to mention something that Elon just responded to that I think every AI semiconductor investor should know. So, let's take a closer look in today's episode. But before we begin, if you're serious about semiconductor and AI investing, I break down major earnings and conferences inside my community, institutional quality research built for retail investors. Get 33% off at whatthechipappen.com. All right, so with AMD first, congratulations to long-term holders. I mean, the stock was up 169% in the past year. Year to date, the stock is demolishing up 113%. And right now sitting at a market cap of 776 billion. Now, AMD is one of my biggest positions next to AMD and Core, right? This is my number three position and is a big portion of my overall portfolio. It's one we've been talking about in this channel for a very long time and one I do believe will be north of $1 trillion in the future. When that's going to happen, I don't know. I'm not here trying to time the market, but with the overall AI market as we are going to see, I believe that opportunity is definitely at the hands of AMD and they're going to grab it and it's going to go more than a trillion dollars. Now, I did mention that I want to first kind of discuss something that Elon Musk mentioned. I think this is actually very very important. So earlier today, someone from the All-In podcast, Jason, mentioned that the difference between the open- source models I'm using and Frontier models is negligible already. Elon Musk responded, "It is actually a world of difference." And I I I believe that everybody has to read this themselves, but I think Elon is pretty much trying to say that frontier models and open source models are not comparable right now. And I I actually believe this is a very important thinking because AI bears might get confused when they hear this take a lot. For me, the open source gap is already negligible is usually a take from people that are using AI but are using it more in very casual forms even simple agentic solutions, right? And and and simple agentic solution is already a kind of a very niche market in the AI space. But for me like I mentioned this take is very dangerous as it can lead to thinking that compute need compute needs will die down or that frontier AI companies will start to slow down and adds this fear of over capacity right because if everybody starts thinking Jose opensource models cheaper tokens um things that I can run on my computer or or even things that are a lot cheaper compared to frontier models if they take the market then what's going to happen to open AAI what's going to happen to anthropic what's going to happen to all these types of contracts that they have with the Neoclouds or with even the hyperscalers, right? Are they going to be able to really need all that compute and use all that compute? And I think with this kind of thought process that starts to add more fear and fear to me though, I believe on hard multi-step reasoning long horizon agents which can be used for novel problems, for healthcare, for ma crazy mathematics, crazy software solutions. It's still a world of a difference. Exactly what Elon Musk said. So that's why in the future as we continue to innovate the agents as they get sophisticated with more tool using with more thinking process and more reasoning behind them that is going to keep driving compute demand higher and higher instead of creating this fear that I believe is going around the market of excess capacity. So those are just my overall thoughts and I do believe this was something that was very important and if true right Elon is definitely one of the players in the frontier model if true I do believe it is very bullish for the overall AI and semiconductor industry and most selloffs in my opinion depending on the stock not every stock is usually an opportunity for me to add to my portfolio. Now that we have that let's take a closer look at AMD. Right? AMD does report earnings this week. day report Wednesday after the market closes. I just want to make sure I have my earnings right. I don't want to give you guys uh that false information. Actually, Tuesday, so I was incorrect. So, Tuesday, August 4th is when they will be reporting earnings. In this channel, we're going to be doing a live stream and after the live stream, we will be covering uh the kind of Q&A session and just kind of commentary after the earnings report. But for AMD, I believe this quarter, this quarter, quarter two that they're about to report is going to be the start of their AI story. And what do I mean by their AI story? Their AI story is the story where sequential growth starting from here on out is not going to stop for the foreseeable future. For example, AMD, right? We've seen growth, but certain quarters are underperforming the other quarters with AMD releasing the Mi Helios, Mi450 in the late half of quarter 3. Um, and then ramping up in quarter 4 and then more solutions in 2026. Um, and more innovations in the CPU market, in the GPU market. Just the revenue segment from here on out is going to be sequential growth and the AI story is finally finally going to be here for what is the market expecting right the market is expecting somewhere around 11.3 I believe 11.3 yeah 11.3 billion in revenue management analysts right historically analysts have kind of been right with where AMD is right if you kind of see the actual numbers the biggest jump was on December 2025th which they outperformed by about 6.2%. It's still a nice outperform, but I it's not kind of that crazy AI story. One of these quarters, either going to be June 26, September 26, or December 26, one of these next three quarters, this is going to change dramatically. One of these uh the actual number is going to be double digits higher than what analyst estimates. Now, there are a few reasons why I believe this is the case. Um and and we see kind of that growth, right? Not only me even analysts are projecting that after this quarter you see the AI story happening right every sequ every quarter after that you see a nice sequential growth and that is the AI story that every AMD AI investor is hoping for now what is creating this AI story the huge demand of tokens right and and and the huge demand of tokens is being driven by a gentic solution right now and in the foreseeable future it's going to be another type of of solution as well and just a gentic AI itself is going to continue to grow. Now because of this uh AMD is increasing their TAM. They also mentioned that right now in 2026 inference has now become the biggest portion of AI workloads right 60% of AI workloads are inference 40% is training and this number is going to continue to get bigger and bigger and better and better as one agentic solutions require more thinking more queries more processing that alone is going to drive uh inference demand higher and then also as more companies and more technologies become available in the AI space as more people become adaptable into the AI space and start using AI more often. It becomes more sticky to your overall business, AI inference is ready to take off. Now AMD is prepared to do this, right? They did uh this upcoming uh second half of this year. AMD is releasing their rack scale solution which is important for the AI industry. We have the Helios. This is going to be their leadership compute. They have this open rack architecture. They have this open fabric um to scale AI. They have this rack scale solution and a pretty much a turnkey solution if you are a data center trying to build on AMD. Now one thing that that is also very important is it's no longer in a place where you can just sell chips. You also have to have some power locked in maybe not just for yourself but the opportunity to have power where you can sell it to some of your customers. Right? Because if I want to buy an AI data center, I have to think of so many things, right? And and with power being limited in such a constraint right now, you're not going to go to AMD and then try to find the power elsewhere because it might be difficult. We see companies like Nvidia, companies like Google and Broadcom and all these players locking up their power right now because it's going to be very tight in in the foreseeable future. So AMD did something similar. They made a contract with Core Scientific. I I think it was announced on July 28th where they're contracting for 530 megawws of of capacity and that could extend to up to two additional gigawatts in the future. But AMD is doing this because now with the AMD Helios rack, you can go to AMD say AMD I want about 100 megawatts, 200 megawatts, maybe eventually in the future 1 gawatt of data center. But where can I get 1 gawatt of data center to be able to buy your chips and do this? And AMD now has the opportunity to say, "Look, I have this partnership with Core Scientific. We have additional gigawatts that we can kind of purchase or contract with. If you buy our system, we can work with this." And I think that is a very very big win. Now, if you are enjoying the episode so far, make sure to join the community what the chiphappen.com. This is a community. I do three exclusive live streams per week. We do Monday, um, Tuesday, Wednesdays, Thursday. We also have exclusive deep dives on earnings. We have exclusive deep dives on conferences. We have my weekly thoughts. There's so much more, right? I even share some of my portfolio updates there. And it it's if you're serious about semiconductor and AI investing, that is the platform for you. So check it out at whatthechiphappen.com. Now in in in regards of what I believe is a huge opportunity for AMD is not just the Helios wreck but one that's going to happen kind of like this quarter is the massive demand of CPUs and CPUs the biggest growth driver since since maybe a year ago has been agentic AI and Agentic AI is used to tool right when you tell your AI company your AI agent to do this and then it starts using different applications it starts messing things around That's where it's using your CPU. So the agentic market was non-existent in 2025 as we can see and in 2027, 2028, 2029, 2030, this is going to be the big driver of the CPU market. Now this is why I personally believe that Aentic AI is still very very early and Aentic AI is going to drive massive demands for tokens for not only CPUs but other types of of semiconductor solutions and is going to be a backbone for the AI industry. So this is something we're seeing right now. We're seeing massive demand and AMD is actually doing extremely well in the CPU market right now. In their most recent AI event, they mentioned that 46% market share of Epic and they continue to accelerate. So, not only are they winning market share, but the total addressable market is getting better. They have the CPUs in pretty much everywhere, right? All the cloud players, all pretty much all the AI companies. They just announced Venice, which is in production today. That's their newest CPU. again working with all the big players there and all the big players mentioned that they continue to be CPU constraint within this segment which is a big market of just 220 billion TAM by the foreseeable future they are also kind of producing chips on a every 2-year basis I think every year they kind of have different variants of it as well so maybe you can say it's kind of like in an annual cadence but their CPU road map is extensive and they already have the CPU for Florence the seventh generation epic like I mentioned Venice is the that's out right now, Ravena, which is coming out uh potentially in 2030. And they even showed benchmarks. And for the market, they're also creating these C CPUs thanks to their advanced packaging solutions, thanks to their chipless solution, they're able to create unique CPUs for everything. If you want a CPU for a host node of GPU servers, you're going to want the kind of Verano or the Venice HF. If you want one for a gent CPU servers and sandboxes, you're going to want the Venice 256 core, right? If you want for general purpose, you have the Venice SP7 or the SPA or the Venx, right? So, there's different workloads needed in the CPU market. We actually kind of saw it here of kind of where general purpose, AI host, and a Gent solution. So, AMD is making sure they're hitting all these markets and has the best opportunity to do it by having unique solutions there. Now AMD during their AI event did not want to slow down, right? They they they took shots at Intel saying that their uh sixth generation uh epic CPU is outperforming sixth generation Intel. Even their fifth generation, the prior generation is still better than Intel, but the overall performance continues to get better. AMD also wanted to take shots at Nvidia and ARM CPU, saying that Nvidia is the true winner here when it comes to a gentic single core performance solution. Regardless, I'm still very excited for a lot of companies in the CPU space because if we are in a shortage, even if you're not number one, you have the opportunity to be able to sell a lot of products outside of the CPU, right? And and and that was the first thing, right? I I want to hear commentary from Lisa Sue about the CPU market. What are some numbers right now? I believe the CPU space alone is going to help them outperform the space. Tell me a little bit more about kind of your supply chain, right? What is the supply chain looking? Are you locking in extra supply in the CPU space because the demand is that crazy and you're making kind of these long-term contracts just for the CPU space which could be massive for you. So any commentary for there is very very important for AMD investors. All right. Now the next thing like I mentioned is just the accelerator space. The accelerator space I put this one second because like I mentioned CPU is the one that I believe can start hitting right now. can start hitting in quarter two already or or quarter two that we just finished and will continue to accelerate as we go on. The AI demand and the AI accelerators, we won't really see much of this. AMD mentioned in their call or their AI event that shipping starts in September, right? September, I believe, is the last month of quarter 3. So, you're not going to see too much in this upcoming quarter or in this upcoming guidance. You're most likely going to get a lot of this growth. You'll get some, right? you'll get some, but that bigger picture you're going to start to get in quarter four where it will be the full quarter and then quarter 1 as it starts to ramp up and ramp up and ramp up. So, this is why I put this second, but still $1.4 trillion market. Now, AMD has a annual cadence, the MI400 which is coming out right now, the MI500 which is coming out in 2027, the MI600 which is going to come out in 2028. So, AMD is is doing really amazing with the GPU space. They actually have some new customers here, right? OpenAI, Meta, Anthropic, Microsoft, and Oracle. These are five big players that are really controlling the AI space, right? If if you have just in my opinion, just Anthropic and Open AAI are more than enough, but these are the two companies, these are the few companies that are going to be using AMD Halo system. And the reason I believe OpenAI and Enthropic are all you need is because OpenAI and Entropic are the ones making these massive contracts with all the hyperscalers. Let's say both OpenAI and Enthropic go to Amazon and say, "Amazon, I need you to get AMD Helios machines." Amazon's not going to say no, right? They're going to be like, "Oh, that's great, right? Cuz we have a massive contract with you. if that's going to make sure that you're going to get this contract and this revenue and we're going to get this revenue a lot faster than we initially thought. Let's go build some AMD solutions, right? We already got you locked in for a 5year plus contract. For us, it makes no difference, but we need to know that you need the demand. So, for these two players and then Meta eventually, right, if Meta becomes a very strong agentic play, very similar as well, maybe you start to see more demand going into other cloud providers. So this is what gets me excited about AMD's in the AI CPU GPU space. Um AMD is also comparing their solutions to Vera Rubin. Now this is where it gets a little tricky for me because I'm not going to lie, Nvidia is my number one position in forms of size is my biggest winner and I still believe Nvidia is going to continue to dominate the AI market. But that doesn't mean AMD is going to miss out on gains, right? AMD and not even a trillion dollar company still baffles me. Um, especially with everything we're seeing and if this AI story is really as true as I believe it, AMD is not only going to a trillion. I'm going to say this right now. I believe AMD is also going to go to two trillion in the future. They're making unique solutions with the Cerebras, which is also pretty fun. We're seeing how AMD is innovating. Again, Nvidia, you are my baby. And Nvidia bulls, don't fight me on this one, right? I'm not saying Nvidia is going to lose. It's just this market is so massive. is so massive that so many people could win. Another fun thing about the AI market is we're seeing this this next evolution of GPU programming because AMD solutions are very open- source and obviously GPU uh software solution is getting better in the AI space. GPU programming is becoming easier. We heard from both OpenAI and Anthropic that when they wanted to start their AMD systems, they pretty much had their AI agents do it. And it be becomes this easier to start to run certain solutions on an AI GPU or AI accelerator or whatever your overall server and your RX scale system more customers are going to be willing to go for you because in the past in the past that was one of the hurdles. Now there's obviously other hurdles that that you need to go through but every time you reduce a hurdle you open up the opportunity for more and more customers. So these uh these are the things I'm going to be keeping a closer eye right in the GPU space. Lisa, can you give us a number? Please, please, please give us a number. One thing Lisa does intend to do is give us guidance on AIG GPUs. But with AMD wrapping up in quarter 3 and then truly truly coming into quarter 4 and so on, can you give us some form of guidance? If there's one thing, if anybody at AMD is watching, this is what investors would love to hear. Give [snorts] us some form of number. I mean, we already know you're going to be shipping to OpenAI, to Microsoft, to Anthropic, to Meta by the end of this year. Those four guys are going to need a lot of compute and they may they're they're definitely going to be paying a lot of money. But can you give us I mean, if you have the contracts, if you have the supply chain um information already, can you just give us some form of range? That's all we're asking for. And you might say, "Hey, we'll give you this range." But remember, remember, it all depends on when we actually ship stuff. So, some of these stuff can actually move to quarter one. I would be understandable with that, but I would just love a number. Maybe the market might. Um, but regardless, I hope you guys enjoyed today's episode. If you are curious about the greatest AI semiconductor community, make sure to check out what the chipappen.com. Peace out. Have a good day and see you all next