AMD Takes a Hit as Musk Shifts to Nvidia for AI Infrastructure

AMD's earnings report was solid, with a 50% year-over-year revenue increase to $11.54 billion and adjusted earnings per share of $1.66 beating market expectations.

The company's data center business drove growth, reaching a record high of $6.7 billion in revenue, doubling from the same period last year.

CEO Lisa Su expressed optimism about AMD's operational momentum, expecting continued strength in the second half of the year due to accelerating EPYC demand and expanding Instinct deployments.

However, the market reaction was negative after Elon Musk announced that SpaceX would fully adopt Nvidia for its AI infrastructure, stating 'SpaceX is committed to using only Nvidia GPUs because they are the best.'

Jim Cramer argued in response that the AI market is large enough for multiple winners and encouraged investors to consider all three semiconductor giants - Nvidia (NVDA), AMD, and Intel - as investment targets.