A caller asked during September 11’s episode of Mad Money if Advanced Micro Devices, Inc. (NASDAQ:AMD) was worth buying given how much the stock tends to rise when NVIDIA moves higher. Jim Cramer commented:
In my conference call yesterday with the club, I admitted that AMD and Dell, I was confounded by my restrictions. Every time I was talking about it on TV, we’re probably going to buy AMD and we’re probably going to buy Dell; those are the two best stocks in this market. I frustrated myself, and I couldn’t, I wasn’t able to pull the trigger because of my restrictions. AMD is a fantastic stock, fantastic company, and Lisa Su is great. Buy it, end of story.
AMD’s Data Center Business is Driving Growth
Advanced Micro Devices, Inc.’s second-quarter results highlighted the growing contribution of its Data Center business. Revenue rose 50% year over year to $11.5 billion, while Data Center revenue jumped 107% to $6.7 billion, representing roughly 58% of company revenue. AMD said Data Center sales should accelerate in the second half of 2026. Non-GAAP operating income reached $3.1 billion, up from $897 million a year earlier, while non-GAAP diluted EPS rose to $1.66 from $0.48. AMD guided for third-quarter revenue of approximately $13 billion, plus or minus $300 million.
At the September 11 Goldman Sachs Communacopia + Technology Conference, AMD executives discussed expanding beyond individual chips toward rack-scale AI systems. Dan McNamara, senior vice president and general manager of Compute and Enterprise AI, said AMD was “transitioning now to full rack scale” and described the company as becoming more of a software and systems company.
AMD Faces Execution and AI Spending Risks
It is worth noting that Advanced Micro Devices, Inc. is taking on greater execution requirements as it expands from individual processors and accelerators into rack-scale systems. The company must execute across chips, networking, software, and system integration as it seeks to expand its position in AI infrastructure. AI spending is another risk. Reuters reported on September 15 that investors were becoming more cautious about the AI-led rally after industry leaders called for a slower pace of AI development, raising concerns about whether massive AI infrastructure spending could continue at the same pace. Semiconductor stocks were among those affected by the market reaction.
The company also remains exposed to the U.S.-China export restrictions. The company says its ability to sell MI308 products to China depends on customer demand, Chinese import controls, and its ability to obtain required U.S. licenses. AMD has also warned that changes in export controls could materially affect its ability to sell products to Chinese customers.
Hedge Fund Ownership Rises as Short Interest Stays Low
According to Insider Monkey, which tracks more than 1,000 hedge funds, 164 hedge funds held AMD in the second quarter, up from 134 in the first quarter. Short interest stood at roughly 2.5%-2.6% of AMD’s float. Advanced Micro Devices, Inc.’s rapid Data Center growth and expansion into rack-scale AI systems have raised the company’s growth profile, while also increasing the execution demands attached to that opportunity.
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