AMD offers high growth potential via CPU tailwinds and market share gains but carries high volatility due to its 47x valuation; suitable for dollar-cost averaging.

All right, the second company is one that you wanted to talk about. That is AMD. You look at AMD, it is a direct competitor here, and it only has 41 billion in trailing 12-month revenue.

So, any market share that it could take from Nvidia would be hugely consequential to the growth of this business.

Now, as it is, it AMD's already growing very nicely on its own. OpenAI, Anthropic, and Meta are all customers of AMD. They don't use exclusively Nvidia products, they do use a lot.

Now, I'm not going to say that they don't. And the CUDA software from Nvidia does keep them locked in to a degree. But there is a there are agreements in place to use AMD hardware as well. In both GPUs, but also in the CPUs.

Yeah, and that's they have really built their business over the past decade or so on being sort of the commodity supplier, you know, instead of dealing with these powerful companies and Intel was really the one that that happened first.

They came in and said, "Hey, we'll work with you." Amazon, I think was was kind of the big name here. "We'll work with you to create a chip that's going to run more efficiently, that's going to be a little bit lower cost.

We'll take maybe even a little bit lower margin." And that's that's how you kind of grow is by answering your customers questions differently than your competitor can.

AMD can come in and say, "Hey, we can do one thing really well." And maybe that one thing is really highly valued by Amazon. And so then that that becomes a big business for them.

So, I think it is one of those areas where a rising tide can lift all boats, but then like you said, that small market share change can be huge for a company like AMD.

Yeah, you look at AI training. I mean, that was really a GPU multiplier and will still continue to be a GPU multiplier. You look at OpenAI's latest GPT-6, supposedly trained on just substantially more GPUs than prior generations.

But agents are supposed to be the CPU multiplier. And so since AMD is such a big player in CPUs, that could be a nice tailwind here. And I think that Nvidia's pushing to CPUs is kind of validation to that theory that, "Yeah, we're actually going to need a lot more CPUs in the future."

The fact that Nvidia would be leaning into that at all. So, maybe the scales are starting to tip more in AMD's favor when it comes to the tailwinds that are blowing from here.

All right, I want to end with a little bit on valuation because you look at the bigger companies that we talked about, Alphabet, trading for about 25 times forward earnings estimates, Amazon trading for about 27 times forward estimates, AMD and Marvell in a very different boat.

Uh AMD trading for about 47 times forward estimates and Marvell at about 43.

Is this the kind of company that investors should be looking at, hey, at opportunistically or if there's a big pullback and you can get these companies for a little bit cheaper, that's when you want to, you know, maybe there's some negativity, right, around the AI trade and some of these core technology companies do pullback, you know, 50, 60, 70%.

That's where there's opportunity long-term or you not worried about the price?

Well, maybe I should answer it like this. I mean, I think that you should expect higher beta or higher volatility with AMD and Marvell compared to Amazon and Alphabet. So, if you are looking to make a single investment today, maybe you want the lower beta stocks in Amazon and Alphabet and you're not too worried about a huge pullback because these are huge powerful companies.

If you're more concerned about the volatility, maybe Marvell and AMD are ones that you dollar cost average in, understanding that chances are they will be significantly lower at some point and also significantly higher.

You don't know where the top and the bottom is. So, you're just going to dollar cost average a position.