AMD (AMD) moved higher after a round of analyst calls. William Blair upgraded the stock, and Bank of America raised its price target while keeping a buy rating. The trigger was news that Nvidia (NVDA) CEO Jensen Huang is leaving.
Market split: an Nvidia problem, not an AI problem
Nvidia (NVDA) fell on the Huang departure, taking a large bite out of the prior day's tech rally. Intel (INTC) also dropped. AMD (AMD) and Broadcom (AVGO) rose. Some traders read this split as a clue: these chipmakers could take market share during the turmoil. Neoclouds came under heavy pressure because they lean hard on Nvidia (NVDA) GPUs.
The key question going forward: does the whole tech trade fall, or do only certain names drop? The market seems to separate an Nvidia (NVDA) problem from a problem for AI as a whole. Not every name moved lower, so Huang's exit does not necessarily crush the AI boom.
The William Blair upgrade
William Blair moved AMD (AMD) to outperform. Their reasoning: leadership trouble at Nvidia (NVDA), plus Intel's (INTC) supply problems, means AMD will keep gaining share and deliver what they call best-in-class growth. No new price target was given, but they said risk/reward has shifted in AMD's favor.
Intel's (INTC) Xeon roadmap keeps facing delays, and the company faces supply shortages. The shift to ARM-based hosts is proving less decisive than feared, which helps AMD (AMD). AMD's valuation multiple has come down a lot as estimates moved higher. The firm sees the scrutiny and leadership change at Nvidia (NVDA) as a net positive for AMD and said there is runway for AMD shares to work from here.
Lisa Su's name has been floated by tech analysts as a possible replacement to run Nvidia (NVDA). AMD (AMD) is up 160% year to date.
The export question
Nvidia (NVDA) has faced recurring scandals, including chips ending up in China and questions about whether export restrictions actually work. Over 20% of Nvidia's sales now land in Singapore. Selling chips to Singapore does not prove they reach China, and there are other possible destinations. But Singapore is a city about the size of Houston, so it is unlikely to be the real end point for a fifth of Nvidia's sales. It may be a route to somewhere else.
If AI is treated as an arms race, where these chips go and the story behind it deserve serious scrutiny. The same concern applies to AMD (AMD): roughly 15% of its sales go to Singapore. The takeaway is that more of this chip technology should be built domestically.
The trade
AMD (AMD) could benefit if buyers pick a different horse, but Nvidia (NVDA) still holds a sizable lead in computing chips. AMD is catching up, and Lisa Su has done a great job running it.
Nvidia (NVDA) is well off its lows. I would not chase AMD (AMD) here just because Nvidia is in pain. A better long play uses Nvidia's very expensive puts and high volatility: sell next Friday's 550 puts for $13. That is about 2.5% for a week and a day of work, which beats buying the stock and chasing it up at 570 or 560.
