Sam Badawi
The BIGGEST Beneficiaries from AMD & OpenAI | It’s Not Who You Think
10/7/2025, 5:39:32 PM
Economic Summary
- OpenAI is taking a strategic stake in AMD and committing to build six gigawatts of data‑center capacity using AMD chips, implying sizable secular demand for AMD server GPUs and ecosystem players (AMD).
- The AI CapEx cycle remains robust: hyperscalers are financing expansion out of free cash flow rather than debt, driving long-tailed multi‑year spending across regions (benefits companies like SMCI, NVDA, AMD, ORCL, MSFT).
- Regional and third‑party data‑center developers (the speaker’s IRON example, CoreWeave comparators) are securing grid‑connected power and financing, unlocking multi‑gigawatt campuses that can be repurposed from Bitcoin mining to AI compute.
- Market caution: some specialist builders (SMCI) cut hardware margins to win share and are shifting toward higher‑margin service contracts, suggesting margin recovery is key to justify current valuations.
Bullish
- OpenAI’s stake and multi-gigawatt commit materially boost AMD demand for data-center GPUs.
- Hyperscalers continue to reinvest free cash flow into AI CapEx, supporting long-term demand.
- SMCI shifting to services and rack supply should drive revenue and margin recovery.
- Miners and operators converting capacity to GPU/data centers provide optionality and fast growth.
Bearish
- Valuations for IRON appear wildly stretched with P/S around 31, risking a sharp multiple contraction.
- Complex cross-ownership/round-tripping (OpenAI stakes + chipmakers) creates conflict-of-interest and market fragility.
- SMCI experienced margin compression and past accounting noise, leaving downside if growth disappoints.
- AI CapEx could hit a peak later, creating bubble risk for highly priced AI infrastructure names.
Bullish tickers
AMDSMCINVDAOSCRAPLDRIOTCLSKCOREWEAVEORCLMSFT
Bearish tickers
IRONSMCIAMD
AMD
1 price targets
300
Bullish
OpenAI deal (warrants + multi‑GW build) directly increases AMD server GPU demand and validates product adoption.
Bearish
Warrants issued to OpenAI and potential dilution, plus general market re‑rating risks if AI spending slows.
SMCI
1 price targets
62.27
Bullish
Large hyperscaler orders, custom racks (NVL72) and transition to services should accelerate revenue and restore margins.
Bearish
Aggressive discounting to win market share drove margins down and past accounting/earnings noise raises execution risk.
IRON
3 price targets
1000672500
Bullish
810 MW operating capacity and a pivot from Bitcoin racks to NVIDIA GPUs create large near‑term growth and contract opportunity.
Bearish
Current market pricing implies extreme forward multiples (very high P/S); consensus scenarios look unsustainably optimistic.
NVDA
Bullish
Primary GPU beneficiary from expanding AI data centers and hyperscaler GPU demand.
OSCR
Bullish
Direct beneficiary of proposed ACA subsidy extensions, boosting managed‑care enrollment and revenue.
Bearish
Policy uncertainty around ACA extensions could reverse gains.
UNH
Bullish
Mentioned as a large managed‑care competitor with less ACA exposure than specialty plays.
RIOT
Bullish
Optionality to lease or convert mining capacity to data‑center/GPU workloads.
CLSK
Bullish
Similar miner optionality to pivot toward hosting/colocation for AI compute.
APLD
Bullish
Active in data‑center conversions and deals with AI/cloud customers.
COREWEAVE
Bullish
High‑growth comparator with lower P/S used to benchmark expectations for newer operators.
ORCL
Bullish
Active participant in multi‑party data‑center deals, providing credit/capacity to projects.
MSFT
Bullish
Hyperscaler demand driver and partner/lessee in large-scale AI infrastructure contracts.
People mentioned
SamChrisUnh PatelDan RobertsRia WilliamsWill SmalesCleo FieldsDonald Trump