Quick Read
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AMD's data center revenue surged 107% to $6.72B in Q2, with management guiding Q3 revenue to ~$13B and projecting data center revenue to more than double year-over-year in 2027.
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OpenAI, Meta, and Anthropic have committed gigawatts of AI capacity to AMD, lending weight to the company's growth forecasts.
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ARK's AMD trim reflects ETF rebalancing mechanics rather than a fundamental signal, and quarterly earnings guidance tells investors far more than Cathie Wood's trade alerts.
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Advanced Micro Devices( NASDAQ:AMD ) trades at $566.42, and its fundamentals carry more information than Cathie Wood's latest trade in the stock. Revenue growth has sped up, and that growth is the key metric to follow.
AMD designs EPYC server CPUs, Instinct AI accelerators, Ryzen PC chips and embedded processors. Data center sales now make up 58% of total revenue, and the shares are up 164.48% year to date. ARK Investment Management cut its share count during the second quarter and still held 1,416,443 shares. ARK runs concentrated thematic ETFs that rebalance all the time to cap position sizes and pay for new ideas. A trim results from ARK's portfolio management decisions.
Data Center Revenue Doubling Makes a 35x Forward Multiple Look Reasonable
Second-quarter revenue rose 50.1% to $11.54B, and non-GAAP EPS of $1.66 beat the $1.61 estimate. Data center revenue climbed 107% to $6.72B. Management guided third-quarter revenue to about $13B and said it expects data center revenue to "more than double year-over-year in 2027."
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The customer list is what gives that forecast weight: OpenAI has committed to 6 GW, Meta Platforms( NASDAQ:META ) to up to 6 GW and Anthropic to up to 2 GW. All those gigawatts have to be powered, cooled and networked by somebody, which is the whole basis of our free report on seven AI infrastructure suppliers that aren't chipmakers, here. The forward P/E is about 35 and the PEG ratio is 0.557. That's cheap for a company growing this quickly.
A 148x Trailing Multiple Leaves No Room for a Helios Stumble
The trailing P/E sits near 148, and the free cash flow yield is just 0.72%. Free cash flow fell 9.9% as capex rose 186.5%. Gaming revenue dropped 31%, and management expects PC demand to soften in the second half. A beta of 2.454 means any slip gets magnified.
Export controls, reliance on Taiwan Semiconductor Manufacturing( NYSE:TSM ) and tight server CPU supply all add risk. AI accelerators also carry gross margins "slightly below corporate average," so faster growth in that business could weigh on overall margins.
Why Waiting for Helios Shipments Has Merit
Helios rack shipments only start ramping in the fourth quarter and into 2027. Until that revenue shows up in reported results, the gigawatt deals are still forecasts. The next earnings report, with its about $13B target, is the near-term test.
Wall Street Still Sees Double-Digit Upside
The average analyst target of $640.21 means about 13% upside from $566.42. Analyst targets are a rough guide and often prove wrong. Of the 56 analysts covering AMD:
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Strong Buy: 5
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Buy: 40
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Hold: 11
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Sell: 0
Over the past year, AMD returned 114.29% while the S&P 500 rose 11.94%. Over the past month, AMD fell 6.77% as the index added 0.69%. The stock is trading below its 52-week high of $658.52.
AMD's Earnings Path Matters More Than ARK's Trades
At $566.42, AMD's outlook hinges on a few catalysts.
Growth from here depends on Helios. Initial shipments are coming now, there's a step-up in the fourth quarter, and the ramp continues through 2027. Each quarter that confirms the ramp makes the forward multiple look cheaper. The CFO also said EPS will be "significantly higher than the $20" target from Financial Analyst Day.
The stock pulled back over the past month. The case falls apart if Helios slips, if hyperscalers cut capex, or if gross margin falls significantly below the forecast 56%.
ARK's trades follow ETF weightings and redemptions, so they track fund flows, while AMD's rack shipments drive its results. Individual investors learn more from AMD's quarterly guidance than from Cathie Wood's trade alerts. Earnings set AMD's direction, and the earnings path points higher.
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