If You Missed Nvidia or Palantir…. This is FAR BIGGER

If you missed buying NVIDIA before it exploded or Palantir before it went parabolic, Wall Street is now screaming that this stock could be far bigger than both. The company they're talking about just posted a revenue growth of 50%, its AI business more than doubled, and the three biggest names in all of AI, OpenAI, Meta, and Anthropic, are now building their entire future around it. The stock is already up over 120% this year, so is this really the next trillion dollar giant, or is Wall Street setting you up to overpay at the worst possible moment like they always do? Let's find out right now. First, let's talk about the hype, and I want to be crystal clear on this. This is what analysts and the media are saying, not what I'm telling you to believe or not necessarily what I believe. The company is AMD, and right now Wall Street is absolutely in love with this company. Yahoo Finance literally published an article asking if AMD is the next NVIDIA. Another headline claimed the stock could rip 40% higher, and the analysts are falling over each other to raise their price targets. UBS at $730, KeyBank at $725, Canter at $700, and a whole crowd of firms up in the $640 to $660 range. Just last week, Raymond James upgraded AMD all the way to strong buy, and lifted its target to $641, arguing that the market for the server BrainChip could balloon to $201 billion by 2030. And this isn't one lone analyst getting excited. Right after AMD's Big July AI event, roughly six major Wall Street firms raised their price targets in a mere three weeks. By then, the stock was already up around 123% on the year. And when it dipped a bit after its latest earnings, some of those same analysts called it a buying opportunity, a chance, they said, to grab the next NVIDIA while it's on sale. Now here's why any of that could even sound reasonable, because AMD will replace NVIDIA is way too strong of a statement. The smarter argument is simply that the AI chip market is exploding so fast that even the second biggest player can make investors enormously rich. That's the real bull narrative. But remember our golden rule, a great story and a great investment are not the same thing. So let's check the actual facts. So are the numbers real or just hype? Honestly, the recent earnings were fantastic. In its latest quarter, AMD's revenue jumped 50% to about $11.5 billion. Its adjusted earnings per share absolutely exploded, increasing 246%. And its profit margins climbed to roughly $0.56 on every dollar. It generated over $1.5 billion in cold, hard cash that quarter, and over $4 billion in the first half of the year while sitting on a mountain of $13 billion of cash with very little debt. For the current quarter, management has guided to about $13 billion in sales, another 41% jump year over year. But here's the number that matters most. Its data center business, the part that sells chips for AI, grew a massive 107% more than doubling to $6.7 billion. That single division is now 58% of the entire company. So AMD has officially transformed from a company that makes chips for your laptop into a genuine AI powerhouse. That one division alone made over $2 billion in profit last quarter. And it's not only AI chips driving it, it's server brain chips called Epic, E-P-Y-C. They're booming as well, which we're going to come right back to. But having two engines instead of one makes the growth a lot more solid. Now, not to be dismissed, but its PC business grew 23% as well, with its business-focused Ryzen chips growing over 50%, winning big companies in healthcare, tech, and finance. Now, one honest note, part of that huge growth looks extra large because a year ago, AMD took a big one-time charge, which makes this year's comparison much easier. But even accounting for that, this was a powerful quarter. And management's forecast for next year's is stunning. They expect their total data center business to more than double again in 2027. Guys, if that's even close to true, this is a business that's growing at a genuinely rare speed. Now, to keep it honest, not every corner of AMD is on fire. Its gaming chip business actually fell 31% because that part rises and falls with video game console cycles. So AMD isn't a magic everything grows machine. But the giant important part, the AI and data center engine, is roaring, and that's what's driving the whole story. So, why are people this excited? Here are the three strongest bull cases. Bull case number one, AMD may be the only real alternative to NVIDIA, and that matters enormously because the giants of AI do not want a single company controlling all the world's AI chips. That would give NVIDIA way too much power over prices. So they're deliberately backing AMD. Look at the proof. OpenAI, Meta, and Anthropic have all signed massive deals to build future AI systems around AMD chips, a combined 14 gigawatts of computing power, which is almost an unimaginable amount. Three of the most important AI companies on the planet are designing their entire future around AMD. That is far stronger proof than any lab benchmark. Even Microsoft is deploying AMD at scale for its AI. AMD doesn't need to beat NVIDIA. It doesn't need to win the whole market. Just being the strong number two in an exploding market could completely transform the company. And the giants love having AMD around as leverage to keep NVIDIA's prices in check. As you recall, we've pretty much said this about NVIDIA ongoing in many of our videos. With their margins increasing, it's going to be hard to keep that profit so high because it allows other entrants into the market to compete on price. Bold case number two, the sleeper hit, those server brain chips. Everyone's staring at the flashy AI chips, but AMD has quietly been dominating the server CPU market, taking it from Intel for years and now controls about one third of it. Here's the exciting part. Those new AI agents need a ton of this exact kind of chip to run. So as the pie gets bigger, their slice is also getting bigger. That is double momentum growth for the company. Management's long-term goal is over half the market and they expect this one business to grow over 70% next year. That is not a someday dream. It's happening right now. Bold case number three, AMD is selling the whole system, not just the chip. The industry is shifting away from buying single chips towards buying entire prebuilt AI racks. AMD's answer is called Helios. It bundles its AI chips, its brain chips, its networking, and its software into one complete package. AMD spent years quietly buying the missing pieces, a networking company, a system design team, and much more to make this all possible. That means for every big deal, AMD can sell far more of the guts inside the data center, making every single customer worth a whole lot more to AMD. Now, this all sounds wonderful, but before you go all in, here are three serious bear cases. Bear case number one, their competitor NVIDIA. Their real moat isn't just the chips, it's the software. For years, AI developers have built everything on top of NVIDIA's software system called CUDA. It's what they know, what their tools run on, what everything is already built for. Switching to AMD isn't as simple as swapping out a chip. You may have to rewrite mountains of software. AMD's software has gotten much better, but NVIDIA keeps sprinting ahead and the scale gap is enormous. NVIDIA's most recent quarter brought in around $96 billion, which is bigger than AMD's entire business several times over. So AMD can make a fantastic chip and still struggle to pull customers away from a giant that huge. Bear case number two, and this is a sneaky one, guys. AMD's biggest customers are quietly becoming its competitors. OpenAI is now designing its own chip. Amazon already has its own called Tranium. Meta is also building its own chip. So the very same giants signing those exciting AMD deals are also racing to build chips that could replace AMD someday. And the scary part, even if AMD steals a bunch of share from NVIDIA, the total market for companies like AMD could actually shrink if everyone starts making their own chips instead of buying them. Amazon already says its Tranium chip has over $225 billion in future revenue commitments. And the eight biggest cloud companies are expected to spend over $710 billion this year, with more and more of it flowing toward their own custom chips, not AMD's. And bear case number three, AMD has to pull off a monster of a manufacturing job. AMD doesn't build its own chips. It relies almost entirely on one company in Taiwan, Taiwan Semiconductor, plus a fragile chain of other parts suppliers. To hit those incredible 2027 goals, everything, chips, memory, packaging, networking, racks, and power has to scale up almost perfectly at the exact same time. The danger here might not even be a lack of customers. It might simply be not being able to physically build it fast enough. AMD is pouring over $10 billion into its Taiwan supply chain just to expand capacity. And there are already reported bottlenecks in the most advanced chip making and packaging steps. And there's one more risk hanging over the entire industry, the government. Export rules already cost AMD hundreds of millions of dollars in China last year when it suddenly couldn't sell certain chips there. A single government decision in the US or China can shrink AMD's market overnight, and that can change with almost no warning whatsoever. And one more thing I want you to know to lock in the open AI and meta deals, AMD handed each of them a special deal to buy huge amounts of AMD stock, incredibly cheap, tied to how much they spend. It's not necessarily a bad thing, but it kind of tells you that AMD had to give up a lot to win those headline customers. And for those of you people out there who are investors of AMD, you're getting diluted. When they issue those shares to the competitors, they're diluting you as an owner. So always look a little closer than just open AI picked AMD. Now, guys, real quick before we dive into a full AMD stock analysis, never take our title and thumbnail literally. We are never here to give a stock tip. We're here to teach you a process that you can apply that same process to your own investing, and it'll help you sleep better at night and make less emotional decisions. When you're making less emotional decisions, you're living a better life, and you're probably making more money because you're not randomly buying or selling at the wrong time. So let's take a look at AMD here, guys. This is the real price of the business, $780 billion. It's the stock price multiplied by the number of shares outstanding. Whenever I look at a company, I also then look at the enterprise value. Guys, we talked about earlier, basically having no debt. That's true. There's $4 billion difference between enterprise value and market cap. That's essentially their debt minus all their cash on hand. And the great part is that $4 billion can be covered in a half-year free cash flow if this free cash flow can continue on as is. Now, a couple of scary things here. It's selling for 92 times free cash flow, even though cash flow has over doubled, and it's selling for 120 times earnings, even though earnings have also more than doubled. And returns on capital are low. For those of you who are new, what this means is they don't get a good return on the money invested in the business. What this basically means is you got to pay a cheaper price for this company because they're not able to grow their profit as fast as other people. Now, guys, look at this. Look at this profit margin jump. They basically did 10% a year for the last five and 10 years, and it jumped to 15.6. That sounds awesome. I will never deny that. But whenever this happens, I always ask the question, is this sustainable? And this is the entire question I have across all of AI. Are all these profit margins sustainable? Are we in a permanent plateau? Now, guys, nothing short of incredible here. Three-year revenue growth rate, 23.6%. Five-year, 25.4. 10-year, 26.7%. Absolutely incredible. But again, is the profit margin sustainable? Let's go to our eight pillars here. Now, guys, not exactly sexy. Got four Xs. Shares outstanding are up a little bit. Returns on capital are down. And the five-year PE and five-year price to be cashflow are bad. The cashflow is up a lot. Low debt. Revenue is up a lot. Net income is up a lot. Great. So there are some good glimmers of hope here, but it doesn't come without its issues. Now, guys, I've thrown a lot at you. There are a lot of metrics here that you're probably looking at going, I don't know what that means. The good news for you is we've made it so easy for you. Click the link below, download in a matter of seconds, our key metrics PDF. It'll explain all these key metrics to you, how they're calculated, what they mean. That way you and I can speak the same language. Guys, it's overwhelming, but guess what? It's been overwhelming for every great investor of all time at some point. I want you to break through that. And the first start is download that absolutely free key metrics PDF right now. And this is exactly why I teach on YouTube. These things are a lot easier than people make them out to be. The only people who make them complicated or want to make them complicated are people who don't really understand it. I'm here to try to break this down. So if there's ever anything that you hear in the video that you go, I don't get what that means, write it in the comments below. Because if we see that a lot, we will spend more time explaining it later. So guys, let's take a look at what analysts think about this company. Guys, a lot of huge optimism here. Look at this, $7.63 per share in profit this year, growing to $42. That's like five and a half times more in the next four years. Again, no analyst wants to be wrong about this. So they're going to go along with the crowd here. And let's go look at the profit. Profit growing from 51 billion to 237 billion. This is like 4.6 X in the next four years. Now guys, here's the issue. We have some story. We have some numbers. Our goal now is to put it together in the stock analyzer tool. So I pulled the stock analyzer tool, but I'm not going to lie to you guys. It's hard for me to assume that a company is going to quadruple or more its revenue in the next four years. But let's see what I can and am willing to look at right here. I'm looking at a 10-year analysis. So my goal here is to say, listen, I don't know what's going to happen in the next three or four years, but let's look at it longer. Let's allow this AI bubble to maybe burst a little bit and then rebound. Because I think that AI is going to be like the internet. We're going to have a lot of people lose, but then we're going to have a lot of growth from here on out. Remember in the dot-com era, even you weren't around, so many internet companies went bankrupt. Did that mean the internet was over? Of course not. It is far greater than we ever thought it was going to be. So first, I did a 10-year analysis. Revenue growth. Guys, I put in 10, 18, and 26%, which I still think is a lot. Yes, I get it. They're growing like crazy and analysts have them quadrupling in size in the next four years. I'm still going to stay at the 18% for the next 10 years. And even that, I'm a little apprehensive about. Next, profit margin and free cash flow. Now guys, I did profit margin of 10, 15, and 20%, and free cash flow of 13, 17, and 22%. This is kind of like what Intel did at its peak. So I'm sitting there saying like, yeah, I think this could be manageable. And guys, free cash flow is a more important stat to me. So I'm going to focus on this free cash flow number going forward. Next, what PE and price of free cash flow would I put in this company 10 years from now? Well, here's one problem we have, guys. Returns on capital are getting worse. So that's a sign of quality. I'm still going to give this company an 18, 22, and 26 just for the hype, but I don't necessarily believe that's the right metric for this. But I'm putting that in there to talk about this for the video because I know a lot of people want to see on its best possible scenario. And then finally, guys, as I always say, a nine or 10% return to find the intrinsic value. What's the company worth? Not what I'm willing to pay for it. So I put in nine and a half percent return here. So remember, that is not the price I want. It's what's the company worth. Now, I want you to look at this and think about what we just did. We didn't listen to what Wall Street told us. We didn't chase the headline. We looked at the actual numbers, the revenue, the margins, the cash flow, and we're figuring out what this business is actually worth to us today. Now, here's the thing. I just did that for you on camera. But what happens tomorrow? When you're sitting there staring at a stock on your own, and you've got CNBC yelling one thing and Reddit yelling another, you don't know what to believe. That's where most people mess up. Not because they're dumb, because they don't have a system. Guys, I don't even watch CNBC or care what any of those guys say because they're not investors. But I understand that years ago, I used to believe they were the geniuses. That's exactly why I built EverythingMoney and the Stock Analyzer tool. You get to put your own assumptions in, your own revenue growth, your own profit, all of it, and it'll tell you the return that you would get at today's price. And also, it's going to tell you the price you need to pay to get the return that you actually want. These are your assumptions, guys. And we're going to guide you along the way to help you become better about putting the right assumptions in here. There's a reason why thousands of people use it every single day in our community. Not because it's overly difficult. But guess what? To start, it can feel a little daunting. But if you tough through it, I assure you that in 10 or 20 tries of it, you will become much better. So you're going to be relying less on your gut feelings, less on a story, and more about the numbers. And guys, that's just one tool. Inside the community, Dalton, who's one of our analysts, he actually called Micron at around $90 a share. It went on to hit massive all-time highs. Guys, some of that is luck. But he was the one looking at Micron when no one else was looking at it. That's what happens when you actually do the work instead of following the crowd. And our community is in there every single week, breaking down stocks, sharing research, and helping each other think through all of their ideas. So here's what I'm asking you to do. I'm asking you to think about what is it worth to you to have that peace of mind, to know what you're buying and why you're buying it, to have a system, the tools, and a team that helps you make better decisions so you can sleep great at night. I assure you that your number is far greater than what it costs. So click the link in the description below. Try it out for seven days for $7 and see for yourself. So I'm going to do two analyzers here. The first one is at 9.5%. The next one is in my own personal margin of safety built-in. So based on 9.5% return, guys, I have a low price of 90 essentially, high price of 685, middle price of 250. So we are quite a ways away. We're looking at about a 2.5% return if I pay today's price. Now, my personal return that I want, this is not the return you should get. I used to do 12%. Because of my current financial situation, I made it a higher return. Why? Because I don't need to buy things unless I really want them at massive discounts. So I put in 15%. So for me, I need to be buying AMD for between 60 and $435 a share and my middle assumption is about 160. So I'm so far away from this company that I just add it to my watch list at a certain price and wait for it to hit. Now, guys, I want to repeat because we've had this happen on NVIDIA. When a year or two ago, NVIDIA was overpriced and now it's green. The question I always ask is, is this current level of revenue something that is permanent? That's what we're asking in all these companies. I don't know that. That's why for me personally, even if the stock was at 150, I don't know if I'd buy it because it's in the too hard pile for me. I don't have foam of worrying about missing out. I would rather wait for this hype to end and then find the great companies are going to win in the long run. I'm not going to lie to you guys. This is difficult, but for me, I would rather miss out on a big gain because I don't really believe that this revenue from AI is at a permanent level that's just going to grow from here. It could, but even look at Amazon. Amazon crushed the internet and the stock still fell 96% even though all their numbers were continuing to get better. So my honest overall take, the bull story is one of the best in the entire market, but never ever forget our golden rule. Even the greatest company on earth can be a terrible investment if you pay the wrong price. Wall Street is out there screaming the next NVIDIA and that's exactly the kind of hype that gets regular people to buy at bad prices. So please don't buy AMD just because of a headline that told you to. Figure out what it's really worth. Demand an ample margin of safety for yourself and let the numbers, not the hype make your decision. And speaking of the AI king itself, we just ran NVIDIA through the exact same process and the results are definitely going to surprise you because they absolutely shocked me. So go watch that full breakdown right now to see whether the giant is actually worth its price today. Click right here on your screen. Thank you for your time.