Dear Reader,
Let’s talk about AMD. WOW…
Advanced Micro Devices (SYM: AMD) shot up 30% yesterday on news that ChatGPT creator OpenAI is taking a 160-million-share stake in AMD.
OpenAI and AMD reached a deal that could see Sam Altman’s company take a 10% stake in the chipmaker.
That’s a big deal.
OpenAI will deploy up to six gigawatts of AMD Instinct GPUs over multiple years, beginning with a one-gigawatt rollout in 2026.
So, what are we saying here?
First of all, AMD issued OpenAI a warrant for up to 160 million shares, with vesting tied to deployment and share price milestones…
What this means is that OpenAI thinks AMD’s chips are good. That Nvidia’s not the only chip in the game, and that they want to make sure they have a steady supply of AMD’s high quality chips going into its rollout.
AMD has been one of our key recommendations for Breakthrough Wealth members.
We recommended AMD at $121 a share, and yesterday the stock price jumped up over $226. It’s up over 50%.
And here’s the thing -
The market cap is around $300 billion right now.
Think about this vis-à-vis Nvidia’s $4 trillion market cap.
Basically, this OpenAI deal supports our thesis that AMD offers a competitive product.
And AMD’s CEO, Lisa Sue, is a seriously tough competitor. Ferocious.
She obviously has brought to market a product that OpenAI really wants a piece of.
Again, it shows us Nvidia’s GPUs are not the only game in town.
So, why is this such a big deal?
Why is it such a gigantic deal, OpenAI taking a stake in AMD?
What’s happening now is what you see in the press every day -
All these AI companies - they’re building data centers…
They’re using massive amounts of chips…
They’re striking $100-billion, $200-billion, $500-billion-dollar deals.
Why?
It’s not about ChatGPT…
That’s not why we see trillions of dollars invested in this. Not at all, okay?
We have that infrastructure.
These huge deals are about building out the future.
You’re getting a glimpse of the future, and it’s not AI…
It’s “E.I.”
Embodied intelligence, and agentic AI. Software you tell what to do and it does it.
For example, travel agent software…
You tell it, “I’ve got $10,000 to spend on a vacation. Book my wife and me a trip to Europe for 10 days,” and it does all the booking for you.
Massive amounts of data centers, electricity and processing chips are needed to bring that vision to life.
Agentic AI, Embodied Intelligence - E.I. - all need massive amounts of chips, data and electricity.
This is why we’ve been so all over these stocks in our portfolios - and Breakthrough Wealth in particular.
So what AMD is saying here, and, by the way, one entrepreneur to another, Sam Altman is very clever -
I think of business as “war for money,” and what Sam Altman is trying to do here with OpenAI in cutting deals with Cisco, AMD, Microsoft…
He knows ChatGPT isn’t the only chatbot game in town. There’s Anthropic, Claude, Perplexity, all these chatbots…
You want to make sure people don’t stop using yours.
You try to build a castle - to have a defendable, durable competitive advantage. That’s the idea here.
In cutting these deals, he’s giving these important partners vested interests in making sure his AI is the one stitched into the fabric of the internet.
It’s wild. And very, very smart…
Because again, today’s chatbots are not what all this mind-boggling AI infrastructure spending is about.
These eye-popping numbers are about embodied intelligence… agentic intelligence.
Now, I know sometimes we’re early on these things.
We recommended AMD March 21st at $121.39 a share…
And here we are in October.
The stock went down a little bit before going up.
But we are telling you that with the CEO of AMD, with what the future of AI looks like, that these are the companies you really want to get involved in.
I almost want to slap myself for saying that out loud, but when you read the 10-K filings in the annual reports, and you listen to what these tech guys are talking about in their earnings calls, they’re painting a picture of the future.
All you have to do is listen.
Then we place our bets around the table.
To come full circle back to AMD - I mean, a $300 billion company, to Nvidia’s $4 trillion - think about what kind of room AMD has still to run.
“The Buck Stops Here,”
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Written by Dylan Jovine