Why AMD’s CUDA-Challenging AI Playbook Makes It the Ultimate Asymmetric Buy. Alex Sirois Fri, October 16, 2026 at 7:15 AM EDT 5 min read AMD -1.50% INTC -2.80% NVDA -1.84% META -0.11% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
AMD's Data Center revenue surged 107% to $6.7 billion in Q2 as OpenAI, Meta, and Anthropic committed gigawatts of GPU capacity.
NVIDIA's scale dwarfs AMD's, but AMD's Helios claims 30% more tokens per dollar, while Intel posted an $11 billion net loss last quarter.
AMD targets $20 in annual EPS by 2027 as Helios shipments ramp, though export controls already cost the company roughly $800 million in Q2.
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and AMD didn't make the cut. Enter your email to see the names that beat AMD. The report is free. Enter your email and see if any of your stocks made the cut.
Advanced Micro Devices (NASDAQ:AMD) pulled back sharply, and the drop puts its AI thesis back in focus. The stock fell 9.42% over the past week as a global tech rout on AI funding worries hit chip stocks. The drop focused the debate over its valuation.
The biggest buyers of AI compute want a second supplier, and AMD is building a full alternative: GPUs, CPUs, networking, rack-scale systems and software. The software layer matters most. On the last earnings call, Lisa Su said "More than 3 million models now run out of the box on AMD," and open-source contributions to ROCm have grown more than tenfold over the past year. That progress narrows CUDA's software advantage.
The customers say yes. OpenAI committed to 6 gigawatts of AMD GPUs, Meta Platforms (NASDAQ:META) to up to 6 GW, and Anthropic to up to 2 GW of MI450 GPUs in Helios racks. Data Center revenue reached $6.72 billion in Q2, up 107% and now 58% of total sales.
The earnings quality keeps rising. Non-GAAP gross margin expanded to 56% from 43% a year ago, and operating margin rose to 27% from 12%. EPS of $1.66 beat the $1.6107 consensus, and management guided Q3 revenue to about $13 billion.
Why Didn't AMD Make The Top 10 List?
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
The balance sheet stays strong. Debt-to-equity stands at 0.071, net debt to EBITDA is -0.159 (a net cash position), and interest coverage runs 28.2x. FY2025 free cash flow of $5.52 billion more than doubled the prior year.
As a superb business, NVIDIA (NASDAQ:NVDA) trades at a lower P/E of 44 versus AMD at 212. Scale explains part of that gap. NVIDIA posted $89.02 billion of Data Center revenue in one quarter and carries a market value near $5.25 trillion. AMD sits near $917.8 billion. A small shift of AI spending moves AMD's results far more than NVIDIA's, and AMD claims Helios delivers up to 30% more tokens per dollar than the competition. That gives AMD more upside sensitivity to share gains.
While Intel (NASDAQ:INTC) grew Data Center and AI revenue 59%, it reported a GAAP net loss of $11.0 billion, its foundry lost $2.1 billion in the quarter, and its net-debt-to-EBITDA ratio stands at 3.40. AMD, by contrast, holds a net cash position.
Valuation can hurt me. A P/FCF of 137 leaves little margin if AI spending slows, and AMD pays no dividend, so retirees get zero income while waiting. Export controls already cost AMD about $800 million in charges in Q2 2025, and Gaming revenue fell 31% last quarter.
My thesis holds because the business absorbed that export hit and still doubled Data Center sales.
Management expects Data Center revenue to more than double year-over-year in 2027 and earnings to clear its $20 annual EPS target, while Helios shipments increase through the fourth quarter and into 2027. The thesis holds while the customers keep signing and the margins keep expanding, because AMD only needs a piece of the AI market to significantly change its results. (we studied what the early signals of the biggest tech winners looked like and put the pattern in a free playbook here.)
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And AMD wasn't one of them.
They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list -->>
Contact editorial@247wallst.com for any questions or corrections.
