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AMD (AMD) Did a Good Job Catching Up to Nvidia (NVDA) but Data Center Revenue Spells Disaster for the Stock

Austin Smith

Published: February 13, 2025 10:34 am

24/7 Wall St. Key Points:

• Advanced Micro Devices Inc.’s (NASDAQ: AMD) data center revenue came in weaker than expected, raising concerns about potential AI demand slowdowns.
• Investors are watching for any signs that Nvidia Corp.’s (NASDAQ: NVDA) data center growth could face similar softness in future quarters.
• Nvidia’s upcoming earnings may still be strong, but any weakness in guidance could trigger a sharp stock correction.
• Also: As good as Nvidia may be for investors, the NEXT Nvidia stocks are even better. Click here to learn more before everyone else catches on. 

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Transcript:

[00:00:04] Doug McIntyre: Lee, I look at AMD as sort of, a miniature NVIDIA. So what happened to their earnings and is there anything we learned about that when we look at NVIDIA’s coming up? Is there any, foreshadowing there?

[00:00:21] Lee Jackson: I think there could be, they had done a good job playing catch up. Behind NVIDIA, but when these numbers came out, the data center revenue was soft and Wall Street took a big, huge, deep breath. They’re like, Oh, but I thought this was where you were going to challenge.

[00:00:38] Lee Jackson: And this is where you were going to be able to compete on price. And for the data center revenue to be the soft part of the earnings. Oh, I think that Wall Street is going to take a very close look at this, and I think that they could be in a little bit of trouble here because pricing points are going to be important anyway, and NVIDIA is probably going to have to watch their pricing points because there’s going to be, there’s going to be a percentage time.

[00:01:07] Lee Jackson: And even though data center growth will continue. Because we know that the AI build out it’s here for good. There’s no it’s huge the number of chips It’s here for good. But boy if they show two or three quarters of data center revenue growth slowing. oh That could be bad.

[00:01:26] Doug McIntyre: Yeah. So I mean, if, I were an owner of NVIDIA, I would look at AMD.

[00:01:33] Doug McIntyre: I take a look at a line item of that earnings report and say, is there anything in there that tells me about where NVIDIA could have a weakness?

[00:01:44] Lee Jackson: I think that makes a lot of sense and it’ll be interesting. I mean, Nvidia always blows the numbers out, but there’s going to be a day and there’s going to be a quarter.

[00:01:54] Lee Jackson: Where things soften and there’s not 90% growth or 50% gross margins or whatever. And whether it’s this quarter, next quarter or the quarter after that, who knows? But there’s gonna be a point where it slows and ’cause it’s been a massive run and, AMD had a good run off their lows with Wall Street thinking there would be a decent challenge there. And then to see this on this earnings report, whoa, nobody saw that coming. Maybe.

[00:02:23] Doug McIntyre: What I’m anxious about NVIDIA is not the quarter. I think the quarter will be a blowout quarter. Well, I think for me is guidance. What worries me is that, that there is actually some softness in guidance and if there’s softness in guidance where they are in terms of valuation, look, that’s a stock that could correct 20 or 25 percent in a day.

[00:02:48] Lee Jackson: Oh, absolutely. The other day on the DeepSeek thing, it was down 17%.

[00:02:54] Doug McIntyre: Okay. Okay. Sorry. I’ll say, what’s 25 percent to 30%. How’s that? Good. Yeah.