SPEAKER_02: 0:00

Chairs of AMD are surging. Do I use that word surging? How about like colossal gain? A company announced a massive new five-year deal with OpenAI. Cannot explain to people how big this is.

SPEAKER_00: 0:11

AMD stock just exploded 23% in a single day, and that's just the beginning. If you're not paying attention to what's happening between AMD and OpenAI, you're literally missing out on one of the biggest investment opportunities of the decade. This isn't just another tech partnership. This is a$100 billion deal that's about to reshape the entire AI chip market. And here's what most investors are getting wrong about this deal. They think it's good news just for AMD. It's actually a massive warning sign for Nvidia and a complete non-starter for Intel, and possibly the most important shift in the AI arms race we have seen. By the end of this video, you'll understand exactly what this deal means, why it happened now, who wins, who loses, and most importantly, how you can potentially profit as a retail investor. Now, I find out about this deal. Unsurprisingly, it wasn't Hamish who told me about this, who's usually in charge of niece around here. No, it was, of course, our Trade Vision app. Can you see that on the screen here? It literally pinked that out at 6.53 in the morning. I'm 12 hours ahead of New York market. Which, if you look at the stock chart, that was here where I put that little blue square. So if you'd simply acted there, even maybe even a minute later or so, well, you'd still be up 10%. And if you'd sold a little bit higher at the top, well, you'd be up probably 20% right now. And we literally send you those updates, the ones that actually matter, only on the stocks that you select every single day direct to your phone. How you get your hands on that? There's a free trial to this. It's called tradevision.io. I'm a co-founder of it. And it's extraordinary. It's where I find out all the good stuff before the market actually opens. And yeah, admittedly, we're three minutes late to Wall Street, but that's a heck of a lot better than most people because Bloomberg put an article out on this just 12 hours later. Well, you know, uh better late than never, I suppose. But yeah, if you want to get this opportunity, check out trademission.io. There's a link down below as well. First link or second link in the description. Now, you're wondering who the heck I am? Um, well, this here was Hamish, who's obviously the brains behind it all. Um, my name is Felix Preen. I am a former investment banker. I'm also the founder of GOAT Academy, where we've helped over 20,000 students so far. I'm very lucky. I'm retired, and my mission and my plan is to use my retirement to help millions of people get to the same point of financial freedom and raise one or two kittens in the process. So now I've been following the AI chip boards for years. Go back on the channel if you want to watch some of the content on, you know, a year ago and so on. But this October 6th is honestly the most significant competitive shift since Nvidia's dominance began here.

SPEAKER_01: 3:05

We need as much computing power as we can possibly get. And I think the whole industry right now is trying to really adapt to the amount of demand for AI services that we see coming over the next uh couple of years.

SPEAKER_00: 3:18

AMD and OpenAI announced a deal that sends shockwaves to the entire sector, and you probably know that by now. But the details are that OpenAI is committed to six gigawatts of AMD's instinct GPUs over several years. To put that into perspective, six gigawatts is enough to literally power five million homes in the US. And you Americans are not exactly like, you know, saving power, the last I heard. Crank up the icon! Um, so think of it this way: it's three times the annual output of the Hoover Dam, all dedicated just to open AI, just from one supplier. And AMD CFO said this will generate tens of billions of revenue, but analysts are saying the total value could exceed$100 billion when you factor in all the ripple effects. But here is where it gets really interesting. AMD gave OpenAI warrants to buy 160 million shares at basically zero cost. That's potentially a 10% stake in AMD. And these warrants aren't free money. They only vest if OpenAI hits specific milestones. So the first batch comes in when they deploy the first gigawatt of GPUs starting the second half of next year, and then they're more tranches. So as they scale towards the full six gigawatt, only then and when AMD stock price hits, and write this down. Only then, when AMD stock price hits$600, and the last I checked, it was trading at about 200 right now, slightly above. So 3x from here, only then will these warrants best. So clearly, the very, very smart folk at OpenAI, and maybe you think they're the you know, devil incarnate, and that's entirely your your right, but they're very smart. Let's accept that. They therefore think that AMD share price is likely to 3x at the end of this deal. So why did OpenAI choose AMD when Nvidia is clearly the market leader? Well, OpenAI's president, a chap called Greg Brockman, he revealed something crucial. Most people are missing. We're already unable to launch many features in Chat GPT and other products that could generate revenue because of the lack of compute power. Let that sink in. Think about that one. OpenAI, one of the most valuable AI companies in the world, is turning down business because they can't get enough chips. They're leaving money on the table. Hamish is rightfully upset about that. Now, right now, Nvidia controls 92% of the AI chip market. And when one company has that much power, you face three massive problems. Supply constraints, you can't get enough chips when you need them. Price vulnerability, you have very little negotiating power, right? They're like, you get the buy from us. Who else are you gonna buy from? And you have a single point of failure. If Nvidia has issues, your entire business is at risk if you're open AI. So this isn't AMD replacing Nvidia. OpenAI already has a$100 billion deal with NVIDIA, by the way, for 10 gigawatt per hours of computing power. This is for additional capacity. So this is not replacing NVIDIA. This is diversification and looking for a cost-effective solution to not have super high risk on just everything is on one vendor. Now, before we get into what this actually means, I'm gonna share with you my full research, literally 24 pages of research on this. And you can download that at felixfriends.org slash AMD. FelixFriends.org slash AMD links down below. But if you really want to know how to benefit from AI and actually use AI to become a better investor, chance has it. I'm running a live training session on exactly that in literally a few hours. So make sure you grab your seat at felixfriends.org slash training and join me live. There'll be no replays. We don't do replays because people don't watch them. So come and join me live. If you're serious about your money, I'll teach you how to manage your money much better with AI and for AI, and you walk away with Broad Street's secrets on how they actually do that. So link is also down below. Felixpencerlog slash training. Now let's talk about the market reaction because this is where things got a little bit crazy, just a little bit crazy. What we're seeing is there's just a massive demand for more compute. I mean, there's so many applications for AI. So AMD stock opened their day at like$164 all the way down here. We gave you the news three minutes later. And then it rallied. This is a minute chart, by the way, because that's the only way we really know what's going on here. So it rallied from the open about 30 odd percent up on the point where we gave you the news. Whoops. It went up something like 20%. By the time it closed, it had gone up, you know, 36% and then settled at about 20% up on the day. This is AMD's largest single-day gain in nearly a decade. The last time we saw this, literally the entire market landscape changed. AMD added about$80 billion in market cap to its valuation in a single day. That's literally more than most SP 500 companies are worth in their entirety. And it wasn't just AMD. The announcement helped push both the SP and the Nasdaq to record highs. My semiconductor heat map here in TradeVision had a pretty green day, some serious green there on the whole semiconductor space because their suppliers are going to get a piece of the action. You've got stocks, let me give you a few, like companies like San Mina, who make components for AMD. They searched like 30% up that day. Now NVIDIA, not so much. They dropped a little. Why? Because there is now competition. And within hours, the sheep of Wall Street, sorry, the analysts of Wall Street, I misspoke. They were racing to upgrade AMD. And I mean massive, massive upgrades. Barclays raised their price target to now$300, implying an extra 50% upside. And look, we're gonna be real about this. AMD has been the underdog in AI chips for years. Nvidia has dominated with like this 90% market share. The deal does change that narrative. When OpenAI, literally the most important AI company on the planet, sorry Elon, they choose your chips for$100 billion multi-year partnerships. Well, it's validation of the highest level. So their data center business is about to explode. Tens of billions in committed revenue over the deal life, analysts saying it's worth somewhere from$50 to$100 billion just this one deal. And they could reach a 10 to 15% market share, having some of Nvidia's desert. And I bet you, other MASA customers think Microsoft, Meta, Google, they're watching. And they're going, maybe we should do that deal too. And OpenAI will not just be a customer, they will actually help them build better chips, better software ecosystems, more developers, optimizing A and D. Top engineers now want to work on chips powering the best AI out there, according to Sam Altman. Again. Sorry, Elon. And the Warren structure is actually really genius. Why? Because it means OpenAI really wins if they get this right. So they've got a real incentive to help AMD here build a better product. And then, well, we could all participate in the 3x on AMD. So they have skin in the game. They want AMD to win now. Now, is there a risk? There's always an execution risk, right? Management needs to actually deliver six gigawatts of computing power starting late next year. That's a big manufacturing challenge. Who do they rely on? Well, let me give you another ticker. Who's going to benefit from this? TSMC. They need their chip production. Now, they're kind of stretched in. So can they deliver? Hmm, I don't know. We'll find out. And there is that 10% warrant, which could also be dilutive. Although if we go up 3x and then they dilute us 10%, I don't think we're going to be too upset about that, but it's just something to bear in mind. Some institutional investors are going to say, oh, what's something a bit to worry about? But as I say, it'll only happen if we 3x. Now, NVIDIA does have B deeper pockets, so they're going to put out better and better chips, more power efficient and so on. But but let's think about what this means for NVIDIA for a second.

SPEAKER_02: 12:16

I think it says that the total addressable market is much bigger than people say. They need uh look, Sam Album must think they need every single chip out there in a way to be able to block everybody else.

SPEAKER_00: 12:27

It does say to me that So no, this is not the beginning of the end of NVIDIA. It really is not. That's nonsense. Yes, NVIDIA stock dropped slightly on the announcement, but they still have 92% of market share, right? And OpenAI is increasing the NVIDIA purchase, so they're not replacing them. So the NVIDIA, the AMD deal is good for the market, but NVIDIA's deal is better. And there's a simple reason that NVIDIA isn't going anywhere. It's called CUDA. A lot of people don't understand that. That's the software system. Millions of developers are trained on NVIDIA's platform, which is called CUDA, and it's a massive switching cost. Nobody wants to retrain their developers, so they're going to keep using the same system. The chips are also still best performing, especially for training workloads. And well, the next Gen DPUs coming will have significantly better improvements. And quite frankly, they're more profitable. They have better margins and therefore they have bigger RD budgets. So NVIDIA isn't dying, but they're now facing their first real competition. So their market share will drop. Nobody's gonna maintain a 90% market share. That would be absurd. So they need to be really, really good at delivering. Otherwise, they're gonna lose more of that market share. But as I say, the pie is growing. Now what about Intel? Well, there's a harsh reality here. Intel is barely mentioned in any of the coverage about this deal. And the silence is rather loud. Intel has less than a 3% market share. Then Gaudi chips haven't gained meaningful traction. Enterprise customers are not adopting it at any scale. So then partnership here makes Intel's path harder. The market is basically consolidating on two primary players. You have NVDA and you have AMD. And by the time Intel's next chips are ready, well, AMD will have years of open AI deployment experience. And therefore, major customers are not choosing Intel. But Intel still dominates the CPU space. So they have opportunities in complementary products. So if you're buying Intel, don't buy it for AI accelerator exposure. That ship's basically sales. The CPU business and the foundry turnaround, they're the real thesis here. But this deal doesn't really change Intel's investment case. They're playing a very, very different game here to those guys. So how should US retail investors think about this? Can we stop that already?

SPEAKER_02: 14:55

This is huge. And it has to do with the fact that this is going to be big and that OpenAI is going to have the money. Why? Because of the business they're going to do, because I believe in the 2028-2029 theory.

SPEAKER_00: 15:07

Look, this AMD OpenAI deal is one of the most significant investment catalysts in the semiconductor industry in the last five years. This isn't again rich quick trade. This is a fundamental business transformation. It'll take years to play this out. So AMD is now positioned for growth. Now you're going to want to expect some serious volatility in this journey up. And you're going to want to have, I'd say, a three to five year time horizon. So you're betting on successful execution and market share gains. I would say if you like the AI chip space, there is a smartness in owning both AMD and NVIDIA because the space goes up. Both of these will benefit. And I'm going to work on a video on all the supply chain for these guys, the shovel businesses. If you're interested in that, write shovel in the comments and we'll put that out shortly as well. If you want to be more conservative, then you can go for an ETF. There are several of them. There is MHSMH, for example, there is SOXX. These are ETFs that'll just give you sector exposure, which will be heavily skewed towards NVIDIA. But also memory makers, equipment manufacturers, and so on that'll have less volatility. So you need to watch out for the milestones. Are they delivering on the deal as expected? We'll give you the news live as it happens when it's relevant and only when it's relevant. By the way, we only give you news on TradeVision that is actually going to move the stock. Tradevision.io, check out a free trial to that and see if you like it. If you don't, also let me know, but make it better. 20,000 of you already using it. So watch out for earnings. Watch out for the competitive response. Watch out for the custom chip market, which is people like Microsoft, Amazon making their own chips. But the key takeaway here, everything is literally just changed, which would be a fairly daft duty title, which I'm sure someone's going to use. AMD, it's now a serious contender. We now have multiple players in this, and the infrastructure build out is just beginning. AI is just beginning. Yes, there will be a bubble at some point, but I don't think we're anywhere near the top of it because it's actually delivering value. It's delivering revenue for those people who know how to use it. So don't go all in, as always. Learn your risk management, set your stops. You might want to have a longer time horizon on this one than on a lot of other things, and invest in not just the stocks, but in the skills, what's between the ears. And we'll do that together at Felix Rensselor slash training live, where I will literally teach you how to use all the AI tools. I'll give you a bunch of AI tools even to pick better stocks, have better rules, better systems, and become a better investor. That's the whole mission here. Felix Rensselockslash training is where you get your paws on that. And I wish you tremendous success.