Key Takeaways AMD's multi-year OpenAI deal will deploy 6GW of Instinct GPUs for next-gen AI infrastructure. Collaborations with Cohere, IBM, and Tech Mahindra strengthen AMD's enterprise AI footprint. AMD expects double-digit Q3 2025 Data Center revenue growth, driven by its expanding portfolio. Advanced Micro Devices (AMD) is strengthening its position in the AI and data center markets by leveraging a rich partner base that includes the likes of OpenAI, Cohere, IBM, Google, Oracle, HPE, Dell Technologies, ...

Group 1: Company Overview - Advanced Micro Devices (AMD) is leveraging a strong partner ecosystem, including Microsoft, Oracle, Google, Dell, HPE, Lenovo, and IBM, to enhance its presence in the AI infrastructure market, facing competition from NVIDIA and Broadcom [1][10] - AMD's EPYC processors are in high demand for cloud and enterprise workloads, with significant adoption by major cloud hyperscalers [2][10] Group 2: Product Developments - The launch of the Instinct MI350 series has strengthened AMD's system-level capabilities, supporting deployments with AMD CPUs, GPUs, and NICs [3] - AMD has formed a multibillion-dollar collaboration with HUMAIN to develop AI infrastructure powered by its CPUs, GPUs, and software [3] Group 3: Financial Performance - AMD anticipates third-quarter 2025 revenues of $8.7 billion, reflecting a 28% year-over-year increase and 13% sequential growth [5][10] - The Zacks Consensus Estimate for third-quarter 2025 earnings is projected at $1.17 per share, indicating a 21.2% year-over-year growth [11] Group 4: Competitive Landscape - AMD faces tough competition from NVIDIA, which is central to AI computing with its advanced GPUs, and Broadcom, which provides networking chips and custom ASICs for efficient hyperscale data centers [6][7] Group 5: Stock Performance and Valuation - AMD shares have increased by 39.2% year to date, outperforming the broader Zacks Computer and Technology sector and the Zacks Computer Integrated industry [8] - AMD's stock is considered overvalued with a forward 12-month price/sales ratio of 7.46X compared to the sector's 6.7X [9]

Core Insights - NVIDIA Corporation (NVDA) and Broadcom Inc. (AVGO) are pivotal semiconductor companies driving the AI revolution, with NVIDIA focusing on GPUs and Broadcom on networking chips and custom ASICs [1] - Both companies have experienced significant stock price increases in 2023, with NVIDIA up 35.5% and Broadcom up 31.9% year to date [2] NVIDIA Overview - NVIDIA is central to AI computing, with strong demand from cloud providers and enterprises, leading to a 73% year-over-year increase in data center revenues to $39.1 billion in Q1 FY26 [6][9] - The company is rapidly adopting its new Hopper 200 and Blackwell GPU platforms, with expectations for further performance improvements from upcoming versions [7] - However, NVIDIA faces challenges from export restrictions to China, resulting in a loss of $2.5 billion in H20 chip sales during Q1 FY26 and an expected $8 billion loss in Q2 [8][9] - Despite these challenges, NVIDIA received approval to sell H20 chips in China under a revenue-sharing agreement with the U.S. government, which may impact margins [11] Broadcom Overview - Broadcom is a key player in the AI ecosystem, supplying networking chips and custom AI accelerators (XPUs) essential for hyperscale data centers [12][13] - The company is experiencing strong demand for its products, with AI-related revenues expected to rise 60% year-over-year to $5.1 billion in Q3 FY25 [16] - Broadcom's next-generation 3-nanometer XPUs are set for volume shipment in the second half of FY25, with plans for 2-nanometer AI XPU packaging [14][15] Financial Performance Comparison - NVIDIA's fiscal 2026 earnings estimate is $4.26 per share, reflecting a 42.5% increase over fiscal 2025, while Broadcom's fiscal 2025 estimate is $6.63 per share, indicating 36.1% growth [17] - Broadcom has consistently surpassed earnings estimates, while NVIDIA has had mixed results [18] Valuation Insights - Both companies are considered overvalued, with NVIDIA trading at a forward P/E of 36.26X and Broadcom at 38.46X, indicating NVIDIA may appear as the better deal [19] - Broadcom's premium valuation reflects its diversified business model and steadier earnings profile compared to NVIDIA's exposure to regulatory changes and competition [22] Investment Recommendation - While both companies are positioned to benefit from AI, Broadcom presents a more attractive risk-reward balance due to NVIDIA's near-term challenges and growth uncertainties [23] - Broadcom currently holds a Zacks Rank 2 (Buy), while NVIDIA has a Zacks Rank 3 (Hold), suggesting Broadcom is the preferred investment option [24]