To The Moon

$Advanced Micro Devices(AMD)$ has indeed shown strong performance recently, with its stock surging over 40% in a relatively short period and analysts raising price targets to $165 and $175, and even as high as $250 by some. This certainly suggests a potential "rally" is underway or strengthening.

It definitely looks like AMD’s rally is more than just a blip, there is real momentum building behind it. Since bottoming out in April, the stock has surged over 60%, fueled by a wave of bullish catalysts.

I have been holding AMD long-term after a series of DCA. Now it is looking good for a good momentum upside.

🚀 What’s Driving the Rally?

AI Hardware Momentum: AMD unveiled its MI350 AI accelerators, claiming 4x the compute power of the previous generation. It also teased the MI400/450 series, aiming to challenge Nvidia’s dominance.

Strategic Acquisitions: The company acquired Brium (AI software optimization) and Enosemi (silicon photonics), strengthening its full-stack AI ambitions.

Big Partnerships: AMD signed a $10B deal with Saudi-backed Humain to supply CPUs, GPUs, and software for AI infrastructure. It’s also collaborating with Meta, Microsoft, OpenAI, and xAI.

Technical Breakout: The stock recently broke above its 200-day moving average for the first time since October 2024, signaling a potential long-term trend reversal.

Analyst Upgrades: Price targets are climbing—Piper Sandler raised theirs to $140, and others are eyeing $165–$175 as AMD’s AI roadmap gains credibility.

⚠️ What to Take Note and Consider

Competition from $NVIDIA(NVDA)$ remains fierce, especially in high-end GPUs.

Cloud giants like Google and Amazon are developing their own AI chips, which could limit AMD’s upside over time.

Profit-taking risk: After such a sharp run-up, short-term pullbacks wouldn’t be surprising.

AMD's Performance Compare to Nvidia or Intel?

AMD is holding its own in 2025, but the landscape is nuanced depending on whether you're looking at AI, gaming, or CPUs. Here's a breakdown of how AMD stacks up against Nvidia and $Intel(INTC)$ across key fronts:

🧠 AI & Data Center

Nvidia still dominates with its Blackwell architecture and CUDA ecosystem, powering most AI workloads.

AMD is gaining ground with its MI300 and MI350 accelerators, offering competitive performance at lower cost and power draw. Its recent $10B deal with Humain and partnerships with Meta and Microsoft show growing traction.

Intel lags in AI accelerators but is investing in Gaudi chips and software stack improvements.

Verdict: Nvidia leads, but AMD is the clear No. 2 and closing the gap.

🎮 Gaming GPUs

Nvidia’s RTX 50-series (e.g., 5060, 5090) still leads in ray tracing, DLSS 4, and AI-enhanced rendering.

AMD’s RX 9000 series (e.g., RX 9060 XT) offers better value per dollar, especially with 16GB VRAM options and strong rasterization performance.

Intel’s Arc GPUs are improving but remain niche.

Verdict: Nvidia wins on features and high-end performance; AMD is a strong value pick for mainstream gamers.

🧮 CPUs

AMD Ryzen 9000 series continues to challenge Intel with better multi-threaded performance and power efficiency.

Intel’s 15th-gen Core Ultra chips offer strong single-core speeds and AI acceleration, but AMD often wins in productivity and thermals.

Nvidia doesn’t make CPUs for PCs, but its Grace CPU is used in data centers.

Verdict: AMD and Intel are neck-and-neck, with AMD slightly ahead in multi-core workloads.

AMD offers a compelling mix of upside potential and improving fundamentals. Nvidia remains the premium AI play, but AMD’s underdog momentum and expanding ecosystem could offer asymmetric returns—especially if it continues to underprice Nvidia in key markets.

We might want to look deeper into valuation ratios or compare AMD’s fundamentals to NVDA and INTC?

Valuation Ratios For AMD, Nvidia, and Intel

Let’s break down the key valuation ratios for AMD, Nvidia, and Intel as of mid-2025, so you can compare them apples-to-apples and spot where the value—or froth—might be hiding.

📊 Valuation Snapshot (2025)

🧠 How Do We Read The Valuation Snapshot

Nvidia is priced like a luxury brand: high P/S and P/B, but justified by massive profitability and dominant AI leadership.

AMD trades at a premium to Intel but offers stronger growth, a lower PEG, and positive FCF—a solid middle ground.

Intel looks cheap on surface metrics like P/B, but its negative ROE, shrinking margins, and negative FCF yield suggest deeper structural issues.

While I am now focusing on valuation metrics and sector-specific upside, AMD offers a compelling growth-at-a-reasonable-price story, especially with its improving AI traction. Nvidia is the juggernaut, but much of its upside may already be priced in. Intel, while optically cheap, may be more of a turnaround bet than a value play.

Investment strategies Which I Consider Based On These Ratios?

Valuation ratios like these can serve as a compass to fine-tune our investment strategy, especially with our knack for balancing growth potential and traditional fundamentals.

In this section I am sharing on how I think we can translate those numbers into action.

🎯 Growth at a Reasonable Price (GARP)

Target: AMD

Why: With a PEG ratio under 1 (0.78) and forward P/E around 38.5, AMD fits the GARP mold—offering solid growth potential without nosebleed valuations.

Strategy: Accumulate on pullbacks, especially near technical support (e.g., $125–$130), and ride the upside as its AI business scales.

🏰 Quality Compounders

Target: Nvidia

Why: Despite its lofty valuation (e.g., P/S of 25.6 and P/B of 45.1), Nvidia justifies it with sky-high ROE (115.5%), FCF yield (1.9%), and entrenched dominance in AI.

Strategy: Treat it like a tech blue chip—buy in tranches, reinvest gains, and monitor margin expansion. Great for long-term compounding even if short-term volatility persists.

🦉 Deep Value (with Caution)

Target: Intel

Why: Rock-bottom P/B (1.0) and low P/S (1.8) suggest a cheap stock, but poor ROE (-18.1%) and negative FCF call for patience.

Strategy: Consider a turnaround or options-based approach, like cash-secured puts to potentially enter lower while collecting premium. Suitable only if you believe in a multi-year recovery.

🧠 Thematic Pair Trades

Setup: Long AMD vs. Short INTC or Long AMD vs. SMH ETF

Why: Express conviction in AMD’s relative outperformance, especially in AI infrastructure and CPUs.

Strategy: Use this for hedging or to amplify directional bets while managing sector exposure.

🧩 Bonus Angle for July: AI-Weighted Sector Allocation

Here is something that I consider a bonus angle for July which is to blend AMD with thematic AI ETFs like $Global X Robotics & Artificial Intelligence ETF(BOTZ)$, IRBO, or even $iShares Semiconductor ETF(SOXX)$ , adjusting weightings based on valuation and momentum.

In this way, we will be able to capture broad upside while tilting toward names with favorable PEG and FCF dynamics.

Risk-Reward Setups For These Strategies?

We need to remember that we need to always consider the risk-reward setup when we are planning any strategy, so here is the break down of the risk-reward setups for AMD, Nvidia, and Intel based on their current valuations, technicals, and sentiment.

In this way, we can align each strategy with our July outlook.

🔴 AMD – GARP Strategy (Growth at a Reasonable Price

Setup: AMD’s PEG < 1 and strong AI momentum make it a classic GARP play. A pullback to $125 offers a favorable entry with upside to $165+ if earnings confirm growth. Risk is a retrace to $112 if sentiment cools.

🟢 Nvidia – Quality Compounder Strategy

Setup: Nvidia trades at a premium, but its 115% ROE and 50%+ margins justify it. You’re paying up for quality. A long-term hold or DCA strategy works well here. Selling puts at $140–$145 could also be a smart way to enter with yield.

🟡 Intel – Deep Value or Turnaround Play

Setup: Intel is a high-risk, high-reward bet. Valuation is cheap (P/B ~1), but negative FCF and ROE are red flags. A small speculative position or options-based strategy (e.g., cash-secured puts) could make sense if you believe in the turnaround.

🧠 My Tactical Playbook for July

As I have shared previous that my long-term portfolio is pretty tech-heavy and also my interest in AI-driven growth. This is what I would be considering for AMD, Nvidia and Intel.

Momentum + Valuation: AMD offers the best near-term upside with manageable risk.

Long-Term Core: Nvidia is your compounder—expensive, but elite.

Speculative Edge: Intel is a contrarian bet that needs patience and conviction.

I think it is important for us to understand how we can actually translate these strategies into actionable steps based on technical indicators like RSI and MACD to time entries.

🎯 GARP Strategy – AMD

Objective: Capture AI-driven growth without overpaying.

Steps to Implement:

Watch Technical Levels: Set alerts near $125–$130 for potential pullbacks.

Staggered Entries: Buy in tranches (e.g., 40% at $130, 30% at $125, 30% at $120) to optimize entry risk.

Earnings Watch: Circle August 5—if forward guidance and MI350 adoption are strong, consider adding on confirmation.

Risk Management: Place a stop-loss around $112 (previous support zone), or use options (like call spreads) to cap downside.

Target Exit: $165–$175 range within 3–6 months, or rebalance based on valuation.

🏰 Quality Compounder – Nvidia

Objective: Build a core position in a high-ROE, long-term AI leader.

Steps to Implement:

DCA Approach: Dollar-cost average monthly or quarterly, especially during market dips or sector pullbacks.

Yield Enhancement: Sell cash-secured puts near $140 to enter lower while generating income.

Reinvestment: Reinvest gains from other holdings or dividends into Nvidia as a long-term compounder.

Monitoring: Track key indicators—gross margins, data center revenue, and competitors like AMD or Google TPU.

Exit Plan: Only consider trimming if multiples become unsustainable or fundamentals deteriorate.

🦉 Deep Value – Intel

Objective: Exploit deep undervaluation, but tread carefully.

Steps to Implement:

Speculative Allocation: Limit exposure to 2–3% of portfolio as a high-risk bet.

Options Strategy: Sell $18–$19 cash-secured puts with 30–60 day expiries; high IV can provide attractive premiums.

Turnaround Monitoring: Focus on foundry revenue growth, AI chip developments, and FCF trajectory.

Patience Required: Give it 12–18 months. Don’t average down aggressively unless turnaround shows real momentum.

Exit Plan: Scale out near $26–$30 or after consecutive quarters of strong execution.

🧠 How I Would Be Tracking My Execution

Use tools like TradingView to set valuation alerts, earnings triggers, and news filters.

Log my entry rationale, price, target, and catalysts—review monthly for bias check and course correction.

Consider backtesting your strategies over previous earnings cycles to build conviction.

I will be sharing my July rally Playbook in another article, do look out for it on what I will be planning to do.

Summary

The recent surge in AMD's stock, coupled with optimistic analyst revisions and a clear, aggressive strategy in the high-growth AI market, strongly suggests that a significant rally might be beginning. The company's focus on innovative AI chips, expanding customer base, and open-source software approach are key drivers. However, we should remain mindful of the intense competitive landscape and broader market dynamics.

It is crucial for us to conduct our own thorough research and consider our risk tolerance before making any investment decisions.

By allocating across AMD (GARP), Nvidia (quality compounder), and Intel (deep value), i am not only betting on just one outcome, but I am positioning for multiple scenarios within the AI and semiconductor upcycle.

Using forward P/E, PEG, and FCF yield as entry filters ensures we are not buying into hype blindly. This strategy leans on our strength in reading the numbers and anticipating shifts before they’ are priced in.

Tying entries to events like AMD’s August earnings or Nvidia’s margin reports lets us scale into momentum as conviction builds yet without chasing.

With stops, options overlays (like cash-secured puts or call spreads), and tiered entries, we will be managing downside exposure while staying agile for upside surprises. I am shaping my positioning in a way that reflects my analytical strengths, sector intuition, and risk awareness.

Appreciate if you could share your thoughts in the comment section whether you think AMD could participate in potential July rally and we could actually pair it with Nvidia, Intel and ETFs to do a thematic pair trades.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.