$AMD · Meet Kevin · 2026-11-03

Now, we're going to get AMD earnings and they're probably going to be great. And then what's going to happen is the stock's going to tank cuz that's what happens during buying the dip mode.

So, we're going to get uh AM Dizzle earnings again. They come out uh in about 15 minutes.

We're really down to just AMD now.

chips compared to their estimates of traditional workflows via uh Nvidia and AMD and you know Nvidia and AMD are using AI I to build chips and design chips as well.

All right, waiting for those AMD earnings. We're about two minutes away from those AMD earnings. But custom chip efforts could potentially stoke tensions with some of the backers, especially since you've got companies like Amazon, Google, Nvidia, and AMD making chips.

Uh they're much more of a bargain, I will say, than AMD. And I'm not trying to dump on AMD. I like AMD. Uh like if it dunks on earnings, I want to buy some, you know, get some AMD shares cooking, you know, um some more tiny tiny exposure to it.

Anyway, all right, let's go into AMD. They're going to come out any second now. All right, here they come. Okay, revenue beats. Operating margin beats. EPS beats. Operating income beats.

R&D comes in a little higher than expected. Capex comes in $1 million higher than expected. Is a beat across the board. Uh revenue came in at 1338. Oh, I bet that's rounded from 1337.

No way, dude. That'd be sick. 1338 divided by 1308 is a 2.3% beat. Q4 forecast 17 billion plus or minus 3%. Wow, that's a big move up because 17 divided by 13.38 is a 27% sequential growth.

That's a really good guide. I like that a lot. Yeah, this is this is juicy.

Let's go look at the actual press release for AMD. Stock now moving up. Stocks up about two and a half% after that uh release.

I want to get right into pricing power on these guys. And we're going to see that right here. 1337. Let's go, dude. That is a elite number. Look at that, baby. 1337. There it is.

Elite. Oh, I love that. That is really cool. Oh, I like it. That's That's your buy signal right there.

Divided by 11536. That is 15.9% growth quarter over quarter uh percent growth sequential which that actually means they're forecasting growth at 17 billion which would be we did this math already but I didn't write it down 17 13.3 7 27%.

Is that right? Let me do that one more time. 17 divided by 13.37. Yeah, 27.1% is what they're forecasting. That's really good. The estimate was 16.3. So that is a beat by 17 / 16.3 4.29% uh over what the street was expecting. But that sequential growth is fantastic.

We can see here their total cost of sales were 46% in cost. So the margins are not as good as uh Nvidia. 46% cost, 54% gross margin. And then uh the prior Oh, they have the gross margin written right there.

That's actually an improvement from last year. So I guess I don't have to do that math. That's nice. So we can see margins actually improved a little bit. Let me do the math though.

Year-over-year. 4466 divided by 9246. That is 50. Yeah, it's more like 51.7. 51.7% cost. So, there's a little rounding there. Oh, wait, no, sorry. 48.3% which actually brings you to 51.7 and and they rounded to 52 gross margin last year, right?

So their numbers rounding a little bit which is fine but I think this gives us a little bit more color because that actually shows the improvement is better than expected. So margin improving improvement is better than rounding shows. So that's good. Margins are going up.

uh despite being a competitive uh you know in spite of being a competitive chip market uh AMD gross margins increasing and guide increasing more than expected. I'd say that is very optimistic for the company.

If we take a look at uh their operating income, we can see their operating income 2832 divided by 1272 has exploded over the last year. Operating income is up 2.2 two times year-over-year.

Balance sheet for AMD. I've got bills to pay of 144. I've got cash and short terms 837274. Oops, 7.4. 4 plus 8.37. I've got about 15.7 short-term investments and cash plus 9.2 receivable and 11 inventory.

Plenty plenty to cover bills and long-term debts. Honestly, they they can basically have, you know, no debt.

they are they have a tendency of issuing uh stock warrants to like open aai at uh one penny versus making direct investments like Nvidia does. So I think their cash flow is just a little lower uh percentage- wise cash flow we have net cash provided by operating activities.

Yeah, we're at a we're 1.2 2 billion PL, you know, minus the plant property and equipment here, we're at, you know, 554 mil of free cash flow. That's not really enough to make investments.

Um, that's why they offer stock as uh investments.

Okay. Then over here, we could see they're also taking on debt. They took on 4.7 billion in debt in the last quarter, it looks like. Yeah. Uh, wait. No, that was No, it was in the last It was in the last quarter.

Yeah. Okay. So, you got the debt financing over here as well.

Oh, fantastic. Yeah, it deserves this. This is fantastic. This is helping the whole stack. So AMD results uh AMD announced financial results. Yes. Yes. Yes. We already covered the expectations.

Lisa Sue, Demand for Our Instinct continued to strengthen, accelerated. Third quarter revenue grew 45% year-over-year to a record 13.4 billion. Uh-huh. And that's going to accelerate even more now another 27%.

We saw that data center revenue is up basically almost double. So data center revenue is 8.5 which means of this this is the percentage that's data center 8 what they say 8.5 8.5 divided by 13.37 was technically more like the math it's about 62.8% 8% data centers.

Nvidia is closer to 90% data centers, which you know is good and bad. It's good for Nvidia, but it's also good that AMD is a little bit maybe more diversified.

Client and gaming is still getting whacked. This is not a surprise. People can't really afford new computers. embedded up 29% for aerospace automotive comms industrial and market.

This could even be robotics I'm pretty sure I believe robotics as well. AMD is helping power anthropic meta Microsoft Oracle Open blah blah blah blah. These are partnerships. Nothing particularly unusual here that we haven't looked at before.

MB's expanding capabilities. World Labs bringing research in to help shape super intelligence whatever began sampling some of our new systems on a chip. This is for embedded AMD versal spacera system on a chip to last 15 years.

Wow, that's actually freaking awesome. 15 years.

They know Elon spends like a drunk sailor and they want to sell to him.

PC offerings, the Halo platform. Yes. The Max Pro 400 series processors available. Mhm. Running models locally. Yeah, this this is a huge huge industry. I don't think people appreciate this yet.

My prediction is uh AI labs will enable you to run all frontier models eventually uh on hardware you own stuff you can buy from AMD, Intel, uh Apple, whatever.

That's why Anthropics secretly wants to design chips because they know that's the next frontier is sell you the SAS 2.0 platform you've been sucked into and have set up all your workflows and uh agents on then sell you the system to run it on.

You know, like I don't know to me that sounds very obvious. Big shift in the AI. The A the AI, boys and girls. The AI. Some like to call it SI. Whatever. Okay. So, that was AMD.

This is this is a good earnings day, though. This is good. We didn't have any kind of crazy shock.

Uh but, you know, overall it looks like what how's AMD cooking? AMD is now up 7%. Oh, look at that. It's right back to the uh 523 line. That is a break. Uh it's actually my 520 line.

It it capped at 523 and it's now under that 520 line. But that 520 line is going to be a critical line tomorrow. The fact that we lost that was depressing because once when you lose that line, you like tend to plummet.

And uh that's what we've seen over here over the last few days. Yeah, look at that. As soon as you you lose this line, oh, it's disgusting. And we went all the way down to 466 there for a hot minute. still think people are getting liquidated.

Oo, AMD is trying to break through that line, which is great.

No, AMD outlook reflects strong demand across data centers. Yeah, I agree with that.

and we'll go AMD EPS. AMD EPS 7.58. The forecast that we have for this puppy is that growth will actually double next year that will obviously slow. What it slows to is the big question about four.

Right now they're looking at 56% growth. The stocks trading for call it 520 686 divided by 56 1.22 PEG ratio.

AMD, Apple, Intel, massive companies.

We just got AMD earnings that freaking crushed. They were fantastic earnings. and they increased and beat expectations by about four and a half percent for their guide for next quarter with sequential growth that'll be around 27%. Really good.

They have less capacity though to go conduct circular financing like Nvidia does. They've got somewhere around $500 million of free cash flow. That doesn't even hold a candle to the free cash flow that Nvidia has.

They're now talking about competing with chip designers like AMD and Nvidia. That's going to go away. That is going to be a very bad business model in the future. And I think Anthropic sees the writing on the wall for this. This is,

It's kind of like the pricing power you're seeing over at AMD. We can look at those valuations in just a moment, but let's jump into the AMD numbers over here. What do we see here?

First of all, they have the leadest revenue I have ever seen. 1337. That's freaking hot. I like that a lot. But their costs of sales. So basically, and we're going to figure out their margin over here.

Their gross margin has grown to 54%. Last year, they sat at 51.7% gross margin. So pricing power is going up at these chip designers and hardware sellers.

All this crap is going to get run on AMD chips, on Nvidia chips, on Apple computers, on AS6 that are manu uh that are designed by companies like Marll and Broadcom.

Well, I'll tell you. AMD and Apple, I love them. I've got exposure to them. They are not the cheapest options right now.

If AMD is sitting around 1.25, Kevin, where are the bargains?

Bro, AMD's earnings were fantastic. Guess what happened to PCs? They went to crap. I kid you not. It's right here. client and gaming segment was down 8% year-over-year. Yeah, that's also how Intel got cooked.

It has nothing to do with AI. In my opinion, it's a sign of AI strength. AI is so good, it's driving up the prices of RAM. And as a result of that, what? Well, here you go. You're now kicking butt uh with everything absent, consumers buying, data centers basically double over here at AMD, which is great.

So where you know where does AMD fit in the stack? AMD fits in with their Halo platform which is basically enterprise artificial intelligence their Halo platform like their AI max pros you know these can go in mini PCs or larger mini PCs.

Big big fan of what AMD can build out and you could use a lot of these. Now some of the mini PCs the AMD chips are only like 25 bucks so the margins are a little lower on those.

That segment has a lower margin than obviously data center.

Labor market's holding up and the juice is just getting swosen over at AMD. Let's take another quick glance at AMD and we'll look at some of the other stats here. So, if I grab the uh AMD earnings report that just came out moments ago, another thing that I could see over here is that they want to get into space chips that could sit in space for 15 years.

I wrote a little note that of course because they want Elon to spend on their chips, which Elon says, you know, for the spaceship partnership, they only want to use SpaceX or they only want to use Nvidia.

But AMD knows Elon's going to spend like a drunken sailor. So, why not, baby? Why not make a chip that at least is going to attract Jeff Bezos?

We talked about client data centers. We talked about data centers being up double. That was impressive. We talked about, let's see here, third quarter revenue. Ah, yes. Okay. So, let's look at the revenue numbers.

And we could see that if we jump onto the income statement over here, this was very impressive. So their sequential growth is 15.9%. They're forecasting, so that's from the last quarter.

They're forecasting that between this quarter and next quarter, it's going to almost double from 15.5 uh 15.9% to 27%. So in other words, you're going to see a growth acceleration at AMD.

And this is beating estimates. This is one of the reasons why you're seeing AMD rush back to that 520 legendary line that we have. Every time in my opinion AMD is under 520, you should just buy it.

Not personalized financial advice, but that line right there is very juicy because I think we're going to stay on top of that line in the long term.

Now, AMD is not the cheapest out of these. We have the valuation for it right here. Uh we've got AM Dizzle. Let's see here. AMD, AMD, where did I put my valuation? I got to find it.

So, Apple was two uh based on a higher growth rate. AMD's forecast or their PEG ratio was 1.2. That makes them twice as expensive as Nvidia. So, that's their PEG ratio based on their forward growth of 56% on EPS.

They're twice as expensive as Nvidia, but they're obviously a fraction of the size. So, the argument is that maybe they have more potentially to grow.

I'm a big fan of this. I I think the whole stack is how you kind of diversify. Again, not personalized advice, but I look at it as you kind of want exposure to AI wherever you can get it.

You don't need to go all in on one Neo Cloud or one stock because the volatility will crush you or break your heart or both. Instead, put a little bit into Marll, a little into Broadcom, a little into AMD, a little Apple, a little Nvidia.

Get a little Microsoft in there. I don't like Google, so I'm not touching them. I don't mind a little Amazon, a little SpaceX and Tesla, you know, to me that's a bucket that's going to be deliciously gory glorious over over time.

Uh so looking some more at these numbers here, we talked about carve margin improvement uh moving up, operating income 2.22 times. Really impressive. So really, really nice growth here.

Uh free cash flow, their balance sheet, they got enough money to pay their bills, plenty of money to pay their bills, both short and long term. So, that's not a problem. But free cash flow is only 554 million.

This is why they tend to offer their stock as opposed to uh actually offering cash to invest in companies like Nvidia does. So they'll go to like OpenAI and say, "Hey, work with us and we'll give you call options on AMD stock at 1 cent."

They're called warrants when they're with a company, right? Then uh you know, so you're not really seeing buybacks over here as well. AMD also took on another $4.7 billion in debt.

So even AMD is like, "Oh no, this is the moment, man. We gota we got to spend more money. Let's borrow more and grow more."