TLDR
- Advanced Micro Devices spearheaded a $350 million investment round in TensorWave, a cloud infrastructure company utilizing solely AMD processors
- The funding places TensorWave’s valuation at $1.55 billion with ambitions to reach two gigawatts of data-center infrastructure
- The strategy echoes Nvidia’s approach with CoreWeave and Nebius, prompting questions about “circular financing” arrangements
- Advanced Micro Devices shares declined 3.4% during premarket hours on Wednesday within a wider semiconductor sector downturn
- Wall Street analysts maintain a Moderate Buy rating on AMD with a mean price target of $419.86
Advanced Micro Devices spearheaded a $350 million investment round for TensorWave, a Las Vegas-headquartered cloud infrastructure provider that operates exclusively on AMD silicon, according to a Wednesday Wall Street Journal report. The transaction establishes TensorWave’s enterprise value at $1.55 billion.
Advanced Micro Devices, Inc., AMD
AMD shares commenced trading at $475.51 on Wednesday and experienced a 3.4% decline in premarket activity as semiconductor stocks faced widespread selling pressure.
The strategic move replicates Nvidia’s approach. Nvidia has previously supported emerging “neoclouds” — including CoreWeave and Nebius — that deliver cloud infrastructure for artificial intelligence applications powered by Nvidia processors.
These arrangements attracted skepticism from certain analysts who characterized them as “circular financing” — capital flowing from semiconductor manufacturers to startups that subsequently allocate those funds to purchase hardware from the same chip vendor.
Morningstar analyst Brian Colello observed: “Nvidia’s partnership and investment with CoreWeave is…circular, or perhaps more of a web.”
Advanced Micro Devices is executing at a considerably smaller magnitude compared to Nvidia in this arena. TensorWave currently holds agreements for 500 megawatts of data-center infrastructure, with an objective of two gigawatts within the next twelve months. CoreWeave has already deployed over one gigawatt and aims for more than five gigawatts by 2030.
Colello further commented: “Anyone scarred by the dot-com bubble bursting is keenly aware of the risks of a circular deal…we don’t think this risk is present today…but it bears watching.”
Analyst Projections and Institutional Holdings
Wall Street maintains a generally positive outlook on AMD. The equity holds a Moderate Buy consensus rating, with a mean price objective of $419.86.
Morgan Stanley elevated its price target from $360 to $410 in May, maintaining an equal weight assessment. Sanford C. Bernstein upgraded AMD from market perform to outperform and increased its target from $265 to $525. Benchmark raised its objective to $485 with a buy recommendation, while Citigroup adjusted its target to $460 with a neutral stance.
Institutional investors control 71.34% of outstanding shares. Deutsche Bank expanded its AMD holdings by 35,432 units during Q4, elevating its total position to 9,124,413 units valued at approximately $1.95 billion.
Executive Transactions and UK Expansion Plans
Chief Executive Officer Lisa Su divested 125,000 AMD shares on May 13th at a mean price of $445.51, generating approximately $55.7 million. The transaction was executed through a pre-established Rule 10b5-1 trading plan and decreased her stake by roughly 3.97%.
Executive Vice President Paul Darren Grasby similarly sold 24,376 units in early May at a mean price of $444.39. Company insiders have collectively sold 332,032 units valued at approximately $118 million throughout the previous quarter.
On a more optimistic note, AMD revealed a pledge of up to £2 billion across five years in the United Kingdom to advance AI innovation, establish research collaborations with prestigious institutions including Imperial College London and the University of Cambridge, and enhance workforce training initiatives.
AMD’s latest quarterly financial results delivered $1.37 earnings per share, exceeding the $1.29 analyst consensus. Revenue reached $10.25 billion, surpassing the $9.90 billion projection, and represented a 37.8% year-over-year increase.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
