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Further Reading from MarketBeat.com
Years in the Making, AMD’s Upside Movement Has Just BegunBy Thomas Hughes. Article Published: 5/6/2026. 
Key Points
- Advanced Micro Devices' GPUs compete and complement NVIDIA's, setting the stage for both to proliferate.
- AMD is prime for inference, providing lower-cost, higher-memory products at scale.
- A single NVIDIA AI factory equates to numerous AMD AI inference centers.
- Special Report: Have $500? Invest in Elon’s AI Masterplan
It has been years in the making, but Advanced Micro Devices (NASDAQ: AMD) is now positioned to accelerate revenue and sustain elevated growth for years as it becomes the spokes to NVIDIA’s (NASDAQ: NVDA) hub. NVIDIA’s GPUs and AI infrastructure offer many advantages and will continue to drive AI. However, Advanced Micro Devices’ GPUs, specifically the MI450 line slated to launch this year, also offer advantages that are reshaping the AI landscape. NVIDIA has the first-mover advantage and strong positioning, as its stack was well developed before the AI boom and is best suited for high-powered, rapid model training and the proliferation of AI.
Disadvantages of NVIDIA's products include cost, operating expense, and utility across workloads, factors where MI450s and Helios rack-scale systems excel. Advanced Micro Devices is well-positioned to benefit from NVIDIA’s dominance in AI training, as a single NVIDIA AI factory can produce enough AI models to support many AMD-based inference centers. In this world, NVIDIA’s revenue growth could easily be outperformed, and there is evidence that the shift is underway. Hyperscalers, including Oracle (NASDAQ: ORCL), Meta (NASDAQ: META), OpenAI, Microsoft (NASDAQ: MSFT), and Google (NASDAQ: GOOGL), have either committed to Advanced Micro Devices' products, with deployments expected to begin in Q3 this year, or are preparing for those deployments by planning smooth system integrations. The common denominators are choice, cost, and purpose, as these systems are designed to fit into an integrated ecosystem capable of massive inference. AMD Rockets Higher: Business Is Good for Training and InferenceAdvanced Micro Devices' Q1 earnings results were a blowout, with revenue growth accelerating to 37.8% and outperforming the consensus estimate by more than 300 basis points. Strength was seen in both CPUs and GPUs, affirming the strength foreshadowed by Intel (NASDAQ: INTC), driven by broad-based demand. The key takeaway is that AMD is well-positioned not only to deliver GPUs, but also to supply much-needed CPUs that can drive AI workloads across use cases. The Data Center segment led, up more than 50%, followed by a 23% increase in Client & Gaming and a 6% gain in Embedded. Margins were another area of strength. The company faced margin pressures but managed them well, producing $1.5 billion in GAAP operating income, $2.5 billion in adjusted operating income, and $1.37 in adjusted earnings per share (EPS). Adjusted EPS was up 185% compared to the prior year, outpacing consensus by more than 600 basis points, and is expected to remain strong in the upcoming quarters. The guidance was good, and that may be understating it. Typically cautious, Lisa Su says growth will accelerate meaningfully in the upcoming quarters, forecasting high-single-digit sequential growth in Q2, an acceleration to 46% year over year, and continued strength beyond that. MI450 and Helios will be catalysts in the upcoming quarters, driving considerable strength, as she also said customer engagement exceeds company expectations. Looking ahead, Su also raised the long-term target, doubling her view of the CPU addressable market to $120 billion. Advanced Micro Devices Valuation Is Way Out of Whack: Significant Upside ExpectedIt may take time, but Advanced Micro Devices' revenue is on track to approach or exceed NVIDIA’s within the next few years. The company’s forward-looking estimates appear far too low, and even the consensus as of early May suggests considerable upside is available. Compared with NVIDIA, which trades at an approximate $4.75 trillion market cap, AMD’s $570 billion is a drop in the bucket, setting the stage for a 500% to 600% stock price increase over time. The analyst response to the report has been robust, with numerous commentaries highlighting the strength and outlook, the agentic AI tailwind, and the upcoming MI450 launch. As it stands, MarketBeat tracks 41 analysts with ratings; they show an 80% Buy-side bias, no analyst rates the stock a Sell, and the price target trend is positive. The price action is roughly aligned with the consensus figure, but high-end targets are favorable, with Rosenblatt setting a new high of $490. That high-end target represents 35% upside from the pre-release closing price and is unlikely to be the end of the trend. The price action is mind-blowing, given the April advance. AMD’s price surged by 20% in after-hours and pre-opening trading, setting a fresh high near $420. The move was driven in part by options activity, so further volatility is expected. 
Chasing prices higher is risky, as whipsaws and outsized moves are likely. Critical support is near the pre-opening close and may be retested before the upcoming earnings release. That is when the real catalyst will be unveiled: Q3 guidance, in which Helios rack-scale systems will be sold. |
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