Discussion AMD Earnings Q3 2025

[Doug S]

Additionally the scale of this bubble is much larger than 2008.

The scale of the bubble and the effect of it bursting aren't the same thing. It depends on what underlies it. The stock market has run well ahead of its fundamentals, but since most people aren't buying on margin and aren't taking loans out on the value of their stocks slashing the value of their stocks doesn't have too many knock on effects other than making people with 401Ks feel less wealthy than they did before the crash. It is like the dotcom crash in that respect. This wasn't true for the 2008 crash, because the mortgage market is ALWAYS on margin - and things got pretty crazy before the crash so the "margin" was even thinner than usual.

The unknown for the upcoming crash are the players who ARE investing in the market on margin. I'm not talking ordinary people like you and me, but big investment banks, hedge funds, and the latest swamp that's probably going to light the match that sets off the next crash, private equity. There is so little regulation in PE so no one really knows all the sources they're getting the cash, on what terms, on what margin, etc. so if they get squeezed the answer to the question "who did they borrow from" will determine how much it spills over into the economy as a whole (by this I mean spillover beyond just paper losses in 401Ks)

What is worrying is that a lot of state pension funds have started investing in PE, and the ones who are heavily into it could really devastate the employees who pay into those funds (and the state's taxpayers who will be called upon to make up the difference) Insurance companies are also rumored to invest in PE, so a crash could provide a double whammy of making our home insurance go up even more than it has been.

The reason safe havens tend to fail when there's a crash is the big players need money to make their margins and their forced selling of bonds, gold, crypto basically any liquid or semi liquid assets they have available drives down the prices of everything until the panic subsides. That is, unless the government steps in with another bailout, picking the winners and losers (and the winners will already know they will be winners in advance, which is why they keep inflating bubbles again and again because they know they won't have to bear the losses when they screw up)

 

[mikegg]

For those who think that AI is definitely in a bubble, put your money where your mouth is and short the market/AMD/Nvidia/Google/Meta/Microsoft. They're all running on AI-fueled runs.

By saying that there is an AI bubble, you're saying that the market will be lower in the future than today. So short it. You're almost guaranteed to make money if you think you're right.

If you ask me, I would tell you that we're probably in 1995 of the dotcom and not 2000. We got a few more years of insane growth to go. And even when it pops, market valuations will still be bigger after it pops than in 2025 - like how markets were still higher in 2001 than in 1995. My opinion is actually the majority opinion because the markets are still at or near all time highs. It's the loud minority that keeps talking about the AI bubble right now.

 

[dr1337]

For those who think that AI is definitely in a bubble, put your money where your mouth is and short the market/AMD/Nvidia/Google/Meta/Microsoft. They're all running on AI-fueled runs.

By saying that there is an AI bubble, you're saying that the market will be lower in the future than today. So short it. You're almost guaranteed to make money if you think you're right.

If you ask me, I would tell you that we're probably in 1995 of the dotcom and not 2000. We got a few more years of insane growth to go. And even when it pops, market valuations will still be bigger after it pops than in 2025 - like how markets were still higher in 2001 than in 1997. My opinion is actually the majority opinion because the markets are still at or near all time highs. It's only on social media/news sites that keep talking about the AI bubble right now.

Fully agree. The fact that openAI just did hundreds of billions in commitments to AMD, Nvidia, and Broadcom is a direct tell to the market that they have capital for years to come.

The broadcom systems for instance aren't even expected to come online until 2029, so any investors are already on a 6-7 year outlook. Bubble cannot pop until 2031 at the soonest.

Unless like someone started mass producing AI cards with 512gb of memory and then all of us could run AI at home instead of being beholden to the SaaS providers.

 

[Thunder 57]

For those who think that AI is definitely in a bubble, put your money where your mouth is and short the market/AMD/Nvidia/Google/Meta/Microsoft. They're all running on AI-fueled runs.

By saying that there is an AI bubble, you're saying that the market will be lower in the future than today. So short it. You're almost guaranteed to make money if you think you're right.

If you ask me, I would tell you that we're probably in 1995 of the dotcom and not 2000. We got a few more years of insane growth to go. And even when it pops, market valuations will still be bigger after it pops than in 2025 - like how markets were still higher in 2001 than in 1995. My opinion is actually the majority opinion because the markets are still at or near all time highs. It's the loud minority that keeps talking about the AI bubble right now.

What is this some sort of if you don't have skin in the game you can't have an opinion kind of thing? I mean if that is the case I could use the reverse Uno card and tell you to invest in said stocks? This is silly should we provide documentation? We're just talking here.

 

[mikegg]

Unless like someone started mass producing AI cards with 512gb of memory and then all of us could run AI at home instead of being beholden to the SaaS providers.

If this kind of hardware exists, it also means enterprise hardware will be magnitudes better than home hardware which means cloud AI models will be vastly more capable than what we can run at home.

 

[DrMrLordX]

By saying that there is an AI bubble, you're saying that the market will be lower in the future than today. So short it. You're almost guaranteed to make money if you think you're right.

Shorting is expensive. The longer you maintain the position, the worse it gets, and there's still a chance for any of the AI-ridden stocks to go up (leading to a squeeze). There's already some huge short positions on the table, just not on AMD (that I know of).

 

[mikegg]

What is this some sort of if you don't have skin in the game you can't have an opinion kind of thing? I mean if that is the case I could use the reverse Uno card and tell you to invest in said stocks? This is silly should we provide documentation? We're just talking here.

Everyone is providing their opinion here. I don't have a problem with it. But a huge portion of people are just regurgitating AI bubble talk they heard from somewhere else without an ounce of thinking. And they do so with 100% confidence that they're right.

So go ahead and short the market then. Let's see if they're still 100% confident.

 

[mikegg]

Shorting is expensive. The longer you maintain the position, the worse it gets, and there's still a chance for any of the AI-ridden stocks to go up (leading to a squeeze). There's already some huge short positions on the table, just not on AMD (that I know of).

If you believe that the AI bubble will pop 100% and the market size will be smaller than in November 2025 after it pops, the borrowing cost to short is trivial to the potential drawdown.

 

[DrMrLordX]

If you believe that the AI bubble will pop 100% and the market size will be smaller than in November 2025 after it pops, the borrowing cost to short is trivial to the potential drawdown.

What anyone believes is irrelevant. And you can still get liquidated before the bubble pops, IF it pops. In any case AMD is probably not the stock that people would be shorting so . . .

 

[mikegg]

And you can still get liquidated before the bubble pops, IF it pops. In any case AMD is probably not the stock that people would be shorting so . . .

If it doesn't pop, then that's not a bubble. It's just growth.

Why not AMD? It has an insanely high P/E ratio that is entirely based on it getting a piece of the AI pie. In any AI bubble burst, AMD would go down the toilet, likely much more than Nvidia. AMD has much higher speculation than Nvidia and in a down market, businesses aren't going to buy AMD for AI. They're going to buy Nvidia since the supply of Nvidia chips would ease. Companies are only buying AMD because the supply of Nvidia chips are all sold out and they want a second supplier to negotiate with Nvidia.

 

[mikegg]

Like I mention before a few times here, the confident AI bubble people are in one or more of these categories:

• They're hoping AI doesn't good enough that their job is made redundant by AI
• They're gamers who want cheaper CPUs/GPUs
• They feel like they missed investing in AI and is now hoping AI stocks drop 30-50% so they can finally buy in
• They work in a job that AI hasn't penetrated deeply yet so they're unaware of just how useful it is even today

 

[DrMrLordX]

Why not AMD? It has an insanely high P/E ratio that is entirely based on it getting a piece of the AI pie.

That's not what the earnings report showed. Which is the subject of this thread.

 

[mikegg]

That's not what the earnings report showed. Which is the subject of this thread.

Has nothing to do with earnings report and has everything to do with market values and expectations.

 

[DrMrLordX]

Has nothing to do with earnings report and has everything to do with market values and expectations.

AMD's market valuation is driven by their revenue outlook. Yes the OpenAI story did drive a surge in stock price, but the lasting share value will be dependent on non-AI revenue which still dominates their earnings.

Anyway there IS a massive short position on the table already:

The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops

Michael Burry, who shorted the housing market in 2008, has bet over $1 billion that the shares of AI companies Nvidia and Palantir will fall.

futurism.com

NVidia and Palantir, not AMD.

 

[Joe NYC]

If it doesn't pop, then that's not a bubble. It's just growth.

Why not AMD? It has an insanely high P/E ratio that is entirely based on it getting a piece of the AI pie. In any AI bubble burst, AMD would go down the toilet, likely much more than Nvidia. AMD has much higher speculation than Nvidia and in a down market, businesses aren't going to buy AMD for AI. They're going to buy Nvidia since the supply of Nvidia chips would ease. Companies are only buying AMD because the supply of Nvidia chips are all sold out and they want a second supplier to negotiate with Nvidia.

AMD has much smaller AI exposure than NVidia. Maybe ~$1.75B out of $9.2B revenue, which is 19%.

NVidia exposure to AI is probably 90%

 

[mikegg]

AMD has much smaller AI exposure than NVidia. Maybe ~$1.75B out of $9.2B revenue, which is 19%.

NVidia exposure to AI is probably 90%

Not sure why that matters.

1. I’m talking about AMD stock. Not where their revenue comes from. Their sky high PE ratio is due to Wallstreet believing that they can get a piece of the AI pie.

2. If there is a bubble and it pops, it isn’t going to reduce AI hardware demand to 0. Companies will just buy less GPUs for a while. That’s worse for AMD because the only reason people buy AMD GPUs is because they can’t get Nvidia ones due to insane demand.

 

[mikegg]

AMD's market valuation is driven by their revenue outlook. Yes the OpenAI story did drive a surge in stock price, but the lasting share value will be dependent on non-AI revenue which still dominates their earnings.

Anyway there IS a massive short position on the table already:

The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops

Michael Burry, who shorted the housing market in 2008, has bet over $1 billion that the shares of AI companies Nvidia and Palantir will fall.

futurism.com

NVidia and Palantir, not AMD.

Nvidia’s market valuation is even more driven by revenue outlook. Nvidia’s forward PE ratio is not that high. Next to AMD, Nvidia looks like a bargain.

Michael Burry has been wrong more often than right since 2008.

I don’t care about Palantir. I don’t know what they do. I only care about chip makers.

 

[Hitman928]

Nvidia’s market valuation is even more driven by revenue outlook. Nvidia’s forward PE ratio is not that high. Next to AMD, Nvidia looks like a bargain.

What happens to their revenue if the AI cap ex drops in half? How does their revenue outlook look then? What about for AMD?

 

[adroc_thurston]

Nvidia’s market valuation is even more driven by revenue outlook. Nvidia’s forward PE ratio is not that high. Next to AMD, Nvidia looks like a bargain.

It's 90% tied to the bubbling ML capex with everyone involved now e-begging for government backstops.
2/10 bait.

 

[jpiniero]

It's 90% tied to the bubbling ML capex with everyone involved now e-begging for government backstops.
2/10 bait.

Pretty much. It's the GOAT Bubble. Makes Tulip Mania look tame by comparison.

 

[mikegg]

What happens to their revenue if the AI cap ex drops in half? How does their revenue outlook look then? What about for AMD?

What happens to AMD’s PE ratio if their AI hype drops?

 

[mikegg]

It's 90% tied to the bubbling ML capex with everyone involved now e-begging for government backstops.
2/10 bait.

One post where Altman thinks governments should have sovereign AI compute and now it is begging governments for bail out? OpenAI doesn’t even make AI chips. They’re not in that business. 1/10 bait

 

[mikegg]

Pretty much. It's the GOAT Bubble. Makes Tulip Mania look tame by comparison.

Short the market. Shows us screenshot.

 

[jpiniero]

Short the market. Shows us screenshot.

I don't gamble.

What's the wording? You can't stay solvent longer than the market remains irrational?

 

[Joe NYC]

Not sure why that matters.

1. I’m talking about AMD stock. Not where their revenue comes from. Their sky high PE ratio is due to Wallstreet believing that they can get a piece of the AI pie.

2. If there is a bubble and it pops, it isn’t going to reduce AI hardware demand to 0. Companies will just buy less GPUs for a while. That’s worse for AMD because the only reason people buy AMD GPUs is because they can’t get Nvidia ones due to insane demand.

Suppose the current AI revenue tanks 50% and outlook for future growth from current levels goes to 0% growth.

Which company is then worse off, the one that lost 45% of revenue (90%/2) or one that lost 9% of revenue (17.5% / 2)?