TD Cowen Says This Chip Stock (Not Nvidia) Is the Best Idea for 2026

Core Viewpoint - Nvidia continues to lead in the AI sector, but TD Cowen suggests that Advanced Micro Devices (AMD) presents a more attractive investment opportunity for 2026 due to its expanding AI capabilities [1] Group 1: AMD's Product Launches and Financial Projections - AMD is set to launch the Helios rack-scale platform and the MI450 accelerator in mid-2026, which are expected to significantly boost earnings, potentially doubling by Q4 2026 [2] - The AI accelerator business of AMD is projected to reach $89 billion in sales by 2030, growing at an annual rate of 67% [2] Group 2: Market Position and Stock Performance - AMD currently has a market capitalization of $354 billion, with its stock down 18% from its all-time high, yet it has returned nearly 8,000% over the past decade [3] - Despite concerns regarding AI spending sustainability and exposure to OpenAI, TD Cowen believes these concerns are exaggerated and that AMD is unfairly judged compared to competitors [4] Group 3: Strategic Initiatives and Partnerships - AMD aims to grow its data center business by 60% annually and targets double-digit market share in the AI accelerator market by 2030, with the MI450 GPU series and Helios system at the core of this strategy [5] - A significant partnership with OpenAI involves six gigawatts of computing capacity over five years, which is part of a broader strategy that includes multiple gigawatt-scale deployments with various hyperscale customers, potentially translating to substantial revenue [6]