I’m NOT Buying AMD - I'm Buying These 3 Stocks Instead! (50% CHEAPER)

AMD reported exceptional results. However, instead of buying the dip in AMD, I'm buying three related stocks that trade at valuations 40 to 50% lower while growing earnings at similar or even faster rates. Industry sources just revealed blockbuster news about one stock, strengthening my conviction that it is undervalued by over 90% today. More on that later in the video. AMD's results confirm that central investment thesis remains intact. The AI infrastructure boom is not slowing down. It is accelerating. However, I believe AMD's current price is already priced for perfection. AMD's quarterly revenue increased 50% year-over-year. Data center revenue surged 107%. Cloud and enterprise sales each grew more than 70%. Operating margin reached 27%. Gross margin expanded to 56% and the company continued generating strong free cash flow. Management's guidance was even more impressive. Server revenue is expected to grow more than 80% during the second half of 2026 and more than 70% for full year 2027. More importantly, management expects total data center revenue to more than double in 2027 with data center AI revenue growing well above 100%. But there is one problem. AMD stock is already priced for near perfect execution. Investors are paying a premium valuation based on the expectation that the company will meet or exceed these ambitious growth targets. That's why I am not buying AMD after its earnings report. Instead, I am using AMD's result as confirmation of the broader AI investment thesis. Accelerating demand for AI servers benefits more than one chip designer. It creates greater demand for processors, high-bandwidth memory, networking equipment, data centers, and cloud capacity. Rather than paying AMD's premium valuation, I am focusing on three related companies positioned to benefit from the same infrastructure cycle, but trading at substantially lower earnings multiples. AMD has provided the evidence that the AI demand is accelerating. These three stocks may provide the more attractive entry points. Stock number one is Nvidia. Nvidia's latest quarterly revenue increased 85% while net income rose 211%. That is faster growth than AMD. Yet Nvidia trades at a dramatically lower valuation. Nvidia's forward P/E ratio is approximately 22 times compared with AMD's current year forward multiple of roughly 60 or higher. Based on later year earnings estimates, Nvidia's multiples falls towards 16 and eventually close to 13. AMD therefore requires investors to pay nearly three times as much for each dollar of near-term earnings, even though Nvidia is currently producing stronger earning growth, higher margins, and considerably greater free cash flow. Nvidia's advantage also extends beyond individual GPUs. The company supplies complete AI systems incorporating processors, networking, software, and its CUDA development ecosystem. Customers can purchase an integrated platform instead of assembling every component independently. AMD's success does create competition, but this is not necessarily a winner-takes-all market. When total demand is growing rapidly, two suppliers can expand simultaneously. AMD now estimates that high-performance and AI computing could approach $2 trillion by 2030. Nvidia does not need to maintain every percentage point of market share to continue growing. It only needs the total market to expand faster than competitors can capture share. The major risks include custom accelerators, export restrictions, and slower hyperscaler spending. However, AMD's results directly challenge the slowdown argument. My conclusion is straightforward. AMD's earning confirm the demand, but Nvidia offers stronger profitability, a more mature ecosystem, and a substantially lower forward valuation. That makes Nvidia the more compelling way to invest in AI computing at current multiples. The second stock is Micron Technology, which supplies the memory required to make advanced AI processors useful. Micron's entire projected 2027 and HBM capacity is reportedly sold out, while customers receive only 60% to 70% of requested volumes, supporting stronger pricing, margins, and earnings visibility for the company. A GPU without sufficient high-bandwidth memory is like a powerful engine without enough fuel. The processor may be capable of extraordinary performance, but it cannot operate efficiently unless information reaches it quickly. As AI models become larger and more complicated, the amount and value of memory installed beside each processor continue increasing. This is why AMD's guidance matters so much for Micron. AMD expects server revenue to grow more than 80% during the second half of 2026 and more than 70% in 2027. It also expects data center revenue to more than double next year. Every additional AI server requires DRAM, storage, and most importantly, high-bandwidth memory. Management specifically said it has strong visibility into its HBM allocation for 2027. That statement confirms two things. AMD is preparing for substantial AI system shipments and securing enough advanced memory remains a strategic priority. Micron's valuation make this relationship particularly attractive. Its forward PE ratio is approximately 13.5 times compared with AMD's current year multiple of roughly 60 or more. Based on stronger fiscal 2027 earnings estimates, Micron's forward multiple could fall towards six. This discount exists because memory has historically been cyclical. Prices rise during shortages, manufacturers expand capacity, supply eventually catches demand, and profits decline. But, the current cycle has several structural differences. High-bandwidth memory is technically complex, consumes more manufacturing capacity than conventional memory, and requires more coordination with AI platform developers. Micron is also using multi-year strategic customer agreements to improve revenue visibility and reduce some of the volatility associated with traditional commodity memory. These agreements establish longer-term volume commitments and, in certain cases, pricing protections. However, the risk remains substantial. Memory pricing will not rise forever, new capacity will eventually arrive, and today's extraordinary margins could normalize. But, the good news is investors are not paying an extraordinary valuation. Micron trades at a fraction of AMD's forward multiple despite being essential to the same infrastructure. AMD expects to grow more rapidly through 2027. AMD may sell the computing engine, but Micron supplies the memory feeding that engine. At approximately 6 to 14 times forward earning, Micron offers one of the cheapest way to invest in accelerating AI demand. The third stock is Microsoft, which provides the cloud platform where much of this AI infrastructure will ultimately operate. AMD confirmed that Microsoft plans to deploy its Helios scale AI system through Azure for Frontier model and inference. This is important because it demonstrates that Microsoft is not dependent on a single processor supplier. It can combine different accelerators, GPUs, networking systems, and software with Azure, giving customers access to the computing architecture that best suits their workloads. Microsoft therefore has a different role in the AI value chain. Semiconductor companies compete to sell the hardware while Microsoft earns revenue by renting that computing capacity to customers through the cloud. Its latest results showed that revenue increased approximately 18%. Microsoft cloud revenue grew 27% and intelligent cloud revenue advanced 32%. Commercial remaining performance obligation increased 84% creating a backlog of contracted business that provides exceptional future visibility. Azure growth also remained close to the mid-40s range. Microsoft's growth is slower than AMD's, but its earnings are considerably more predictable. The business is diversified across Azure, Microsoft 365, cybersecurity, databases, enterprise software, and productivity applications. It also owns the customer relationship and distribution channels needed to monetize AI infrastructure repeatedly. Despite that quality, Microsoft trades around the mid-20s forward earnings multiple depending on the price and estimated use. AMD's current year forward earnings multiple remains around 60 or higher while its 2027 multiple is approximately in the mid-30s. In other words, Microsoft offers a much lower valuation with recurring revenue, enormous contracted backlog, and established profitability. AMD must successfully ramp new hardware platforms to justify its valuations. Microsoft can benefit regardless of whether customers choose chips supplied by AMD, Nvidia, or internally designed accelerators as long as those workloads run through Azure. The primary risk is capital intensity. Microsoft is spending heavily on data centers and depreciation could pressure margins if AI revenues develop more slowly than expected. However, its accelerating cloud growth and expanding backlog indicate that demand is already materializing. AMD's results provide additional confirmation. Its guidance show that Microsoft is preparing to deploy more AI capacity while Microsoft Azure demonstrates that customers are consuming its capacity. AMD offers faster growth, but Microsoft provides a cheaper, more diversified, lower risk way to participate in the same infrastructure boom.