AMD Stock Slips: What's Happening vs. NVDA and the Tech Slump
AMD's OpenAI Hype Train: Or Just Another Dead Cat Bounce?
Alright, let's get one thing straight: I'm so tired of the endless tech hype cycles. Every damn quarter, it's the same song and dance. This time it's AMD and their "strategic partnership" with OpenAI. Six gigawatts of AMD GPUs, Lisa Su promising "tens of billions of dollars"—give me a break.
The Numbers Game: Smoke and Mirrors?
So, AMD stock dipped over 2% in premarket trading today. Not exactly a ringing endorsement, is it? They're about to drop their Q3 earnings, and the whisper numbers are $1.17 EPS on $8.75 billion revenue, according to Fiscal.ai. Sounds impressive, right? Until you remember that their own guidance from August was $8.7 billion, give or take $300 million. So, best case scenario, they hit the high end of their already-issued range. Worst case... well, let's not go there yet.
And this OpenAI deal is supposed to be a game-changer? Su's throwing around "tens of billions". But what's the timeline on that? Is that next quarter? Next year? Next decade? Because if it's the latter, investors ain't gonna be thrilled.
Morgan Stanley's Joseph Moore—who, by the way, has an 'Equal-weight' rating on AMD—thinks they'll have a strong data center quarter. Okay, fine. But he's also focused on the MI450 for next year. Meaning the current quarter might not be so hot. It's always "next year," isn't it?
Retail Investors: Smelling a Rat?
The Stocktwits crowd is already bearish on AMD. Low message volume, too. Which either means everyone's given up or they're all too busy shorting the stock. One retail watcher is bracing for a "sell-the-news" event. Smart money. Another one thinks AMD might be pulling a Meta or Microsoft, overspending on investments without seeing any actual ROI. Now that hits close to home, dont it? Remember the metaverse and all the AI chatbots that were gonna change the world? Where are they now?
Here's the thing: AMD's stock is up 115% YTD. That's insane. It's like a goddamn rocket ship. But what goes up must come down, right? And with the average analyst price target sitting 5% below Monday’s close... well, I'm just sayin'.
Speaking of analysts, what do they even do all day? Their average price target is $246.01. Moore's price target is $246. What a coincidence. You'd think they'd at least pretend to do their own research.
Oh, and let's not forget the elephant in the room: China. No MI308 revenue in the Q3 numbers because of export bans. That's gotta sting. How much revenue are we talking about here? AMD isn't saying, offcourse.
The Rack-Scale Mirage
The focus is on AMD's "rack-scale MI450" for next year. "Rack-scale." Sounds impressive, doesn't it? Like they're building some kind of AI superweapon. But what does it actually mean? Is it just a bunch of GPUs stacked together in a server rack? Because if that's the case, I could build that in my garage. Well, if I had a garage. And a bunch of GPUs.
AMD's gross margin for Q3 is flagged at 54%. Which is... fine. But is it enough to justify the current stock price? Is it enough to pay for all those "tens of billions" of dollars they're promising OpenAI? I'm not convinced.
Look, I get it. Everyone's chasing the AI dream. Nvidia is printing money hand over fist, and everyone else wants a piece of the pie. But AMD ain't NVIDIA (nvda stock). They're not even close. And this OpenAI partnership feels more like a desperate attempt to stay relevant than a genuine game-changer.
Is This All Just Wishful Thinking?
So, what's the real story here? Are we witnessing the dawn of a new era for AMD, fueled by the power of AI and Lisa Su's visionary leadership? Or is this just another dead cat bounce, a temporary spike in the stock price driven by hype and wishful thinking? I'm betting on the latter. And I'm not afraid to say it.