Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
AMD could see much more accelerator demand as OpenAI and Anthropic allegedly increase their orders by multiple gigawatts. Nvidia's only real edge over AMD may soon be its size and resources; Lisa Su is a master operator. x.comÂ
Agentic AI demand should drive AMD's 2027 data-center growth well over 100% year on year. Server CPU revenue is forecast to double, with over 5 million Venice units shipping in 2027; Helios racks should ramp mostly in Q1 2027, with over 20,000 expected that year, while MI450/455X volume remains limited by end-2026. Projected 2027 sales are $103bn, with 2027 EPS revised up 15% and a new $720 target at 40x 2027 earnings. x.comÂ
AMD's accelerator partnerships are a weak signal of true demand because it gives customers huge chunks of ownership to secure purchases. Other examples look toothless for now. Single sourcing is a real problem, and AMD likely keeps its data-center accelerator program long term. But a distant second place is not protected: relative competitiveness matters, and an upstart could take share, though there is no evidence of that today. x.com x.comÂ
On-the-ground data, including OCP rack vendors' reports of what they hear from customers, gives a clearer picture of AMD's CPU outlook. AMD's CPUs and GPUs are both in a growth cycle, leaving it on track to outgrow the market. The 14 million GPU figure through 2030 was always above the team's models, as it was for many others; the 2027 GPU sales estimate raised in the discussion was Morgan Stanley's, not theirs. x.com x.com x.com x.com x.comÂ
AMD's projected compute deployment offers a steep growth path for its potential AI upside. UBS AI Research forecasts deployed capacity rising at a 90% CAGR, from roughly 1 GW in 2026 to 9 GW in 2030. x.comÂ
AMD's valuation leaves little room for error even after stellar earnings. Sustaining 40% annual growth to 2030 gives $200B revenue and $80B net income at a 40% margin; at 20x earnings that is $1.6T, or about $990B discounted at 10%, versus $845B today. The market fears its acceleration coincides with the final stage of AI capex growth, as customers diversify from NVIDIA, a tailwind that may fade as capex growth slows after 2027. A solid hold, but new buyers should wait for a bigger decline. … Show more
AMD and Intel look expensive only if agentic AI fails to accelerate CPU demand, and sell-side estimates probably do not yet capture all of that acceleration. AMD trades at 58x and Intel at 68x NTM EPS, with the sell side modeling EPS CAGRs through CY2029 of 66% and 82%. Beating CY2029 estimates of $31.50 and $4.75 by 30-40% would lift those CAGRs to about 78% and 97%. Despite frothy multiples, that EPS growth is hard to argue with. x.comÂ
AMD could become a $20 trillion company within five years in a bull case where AI keeps accelerating beyond comprehension. x.comÂ
Morgan Stanley's sharp cut to AMD's GPU demand forecast raises downside risk, though its original sales estimate may simply have been too high. The bank cut its 2026-30 forecast from 14.1 million to 8.0 million units, or 43.3%, while leaving Nvidia's unchanged. AMD was called to fall 60% when the market opens. x.comÂ
AMD's growth worries should ease after BofA raised its EPS estimate by 34%, to about 4x current levels, which also addresses concern that the stock trades at a premium. x.comÂ