AMD DD — why it’s clearly the #2 behind NVDA, what it takes to hit 1T, and a LEAPS playbook

AMD reminds me a lot of the classic Avis campaign from the 1960s. You know, “We’re only No. 2. We try harder.”

TV ads: https://www.youtube.com/watch?v=cQD-i2o2MO0&ab_channel=BionicDisco

Their print copy was like this:

Avis is only No. 2 in rent-a-cars.
So why pick us?
Because the line at our counter moves faster.
Because every car we rent has to be spotless.
Because when you’re not No. 1, you can’t take customers for granted.

NVDA is the #1 giant with the software ecosystem and data center dominance. AMD is the scrappy challenger, fighting for every server, every GPU, every share, and doing it with smarts, execution, and momentum. Just like Avis, being second forces AMD to push harder, innovate faster, and deliver better value. They can’t afford to sleep at night because well, they are a distant #2, but they got great thing going.

Revenue is at record highs, market cap sits around $245B while NVDA is in the multi-trillion club. AMD is the clear number two in the modern compute stack because it plays in CPUs and GPUs, is gaining server share, owns console/PC lanes, and has legit AI silicon like MI300X/MI350. But NVDA’s software moat and data center dominance explain the huge valuation gap. For AMD to hit $1T it needs both revenue growth and multiple expansion. LEAPS are the best way to take concentrated, long-dated exposure.

Snapshot right now

• Stock trading around $156
• Market cap about $245B
• Shares outstanding ~1.63B

That’s the math base for where it needs to go.

Why AMD is the obvious #2

• Record top line growth — AMD just posted all-time high quarterly revenue.
• Data center traction — EPYC CPUs and Instinct GPUs are winning real hyperscaler deals.
• Competitive AI silicon — MI300X has specs to compete with H100.
• Diversification — Consoles, PCs, servers, embedded.
• But still behind NVDA — Nvidia owns the AI software ecosystem (CUDA) and monetizes way more per chip. That’s why the valuation gap exists.

Strengths

• Ryzen and EPYC continue to eat share from Intel.
• MI300 family has legit bandwidth/performance advantages.
• TSMC fab relationship keeps AMD on leading nodes without the capex burden.
• Cash flow diversity (client, console, data center).

Weaknesses

• Software ecosystem. ROCm is improving but CUDA dominance is sticky.
• Export controls limiting some China sales.
• Margins under pressure when moving some production to U.S. fabs.

The 1 Trillion Question

Current market cap ~245B. What needs to happen for 1T?

• Math: With ~1.63B shares, price per share would need to be ~$613. If share count drifts up to ~1.74B, then ~$575/share.
• Valuation: On today’s ~$29.6B revenue, AMD would need ~34x sales to get there. That’s frothy.
• Scenarios:
  • If revenue grows to $50B and trades at 20x sales → 1T.
  • If revenue grows to $100B and trades at 10x sales → 1T.

So either massive growth, big multiple expansion, or both. The most realistic path: grow data center revenue aggressively with MI350/MI400 and keep winning server CPU share.

Catalysts

• Major hyperscaler purchase commitments for MI350.
• ROCm and software stack adoption that makes CUDA less sticky.
• Sustained EPYC server wins with better ASPs.
• Margin expansion as mix shifts toward data center AI.
• Geopolitical easing on exports.

Risks

• Nvidia’s software moat is still huge.
• Export bans on high-end GPUs to China cut TAM.
• Foundry costs in U.S. fabs may pinch margins.

LEAPS Playbook

• Deep ITM LEAPS calls — Buy delta 0.70–0.85 calls expiring 2027. Feels like stock ownership with less cash down.
• Diagonal call spread — Long 2027 calls, sell shorter-dated calls monthly to reduce cost.
• Protective collar — Own LEAPS, hedge with some longer-dated puts or sell calls around earnings.
• LEAPS + covered calls — Turn them into income plays during spikes.

Final thoughts

AMD a legit semi giant. The stock won’t be NVDA tomorrow, but if MI350 wins real data center share and ROCm gains traction, the market will re-rate it. Hitting 1T is a stretch in the near term, but not impossible over a multi-year horizon.

As a day trader AMD gives you many great moves. Many of our analysts are AMD bull. For you novices, LEAPS let you play the long game without blowing up on short-dated IV spikes. It’s bit pricey for my small port theta challenge. Personally, I’m holding shares strong.

Not financial advice!