Analyzing AMD's Capacity & Lack of "A.I. Visibility" Despite Beat & Raise

Core Viewpoint - AMD reported strong earnings but faced pressure on its stock price due to profit-taking and concerns over data center margins and revenue visibility in AI [2][11]. Financial Performance - AMD beat earnings expectations, with a significant year-to-date stock increase of over 100% [11]. - The company is projected to generate $10 billion in AI data center revenue by 2026, potentially doubling to $20 billion by 2027 [9]. AI Strategy and Partnerships - AMD has laid out an ambitious AI roadmap, including new agreements with OpenAI and Oracle, which are seen as potential drivers for significant AI revenue growth [2][9]. - The upcoming analyst day is expected to provide more clarity on AMD's AI revenue streams and growth potential [5][6]. Competitive Landscape - AMD is recognized as a strong competitor to Nvidia, with a history of offering more affordable products [7]. - Despite the competition, AMD's partnerships and product roadmap may position it well in the AI market, although it may not fully replace Nvidia's dominance [8]. Supply Chain Considerations - The production capacity of Taiwan Semiconductor Manufacturing Company (TSMC) is highlighted as a critical factor for AMD's ability to meet demand for its products [13][14]. - Physical limitations in chip production could impact AMD's ability to capitalize on AI demand, emphasizing the importance of TSMC's expansion [14].