AMD's AI Chip Deal A Risky Gambit or Genius Move

Show Me the Money and the Equity

Alright folks Saul Goodman here your favorite lawyer and financial advisor (don't worry I've got a guy who can handle any *ahem* complexities). Word on the street is AMD just pulled off a whopper of a deal with Meta Mark Zuckerberg's little playground. We're talking potentially $60 billion for AI chips. That's enough to buy a whole lotta' El Caminos believe me. But here's the catch: Meta gets a piece of the pie nearly 10% of AMD if they hit certain milestones. Sounds like a sweet deal for Zuck but is it the best play for AMD's shareholders? As I always say "Better call Saul" before you let anyone dilute your investment.

Nvidia: Still King of the Hill

Now let's talk about the big cheese Nvidia. While AMD is out there cutting deals with equity sweeteners Nvidia is swimming in cash investing in everyone from Intel to OpenAI. They don't need to give away the farm to secure a partnership. That's the power of having the best darn technology folks. As my friend Mike Ehrmantraut would say "No half measures." Nvidia is playing the game at a whole different level. Speaking of risk management maybe it is a good time to think about our future and Screw You Guys I'm Buying Insurance Stocks.

The Jim Cramer Factor

Our buddy Jim Cramer over at CNBC is all over this questioning why AMD needs to give away equity if their products are so good. He points out that Nvidia isn't doing this. They're calling the shots from a position of strength. Cramer's Charitable Trust is even long on Nvidia (NVDA). I gotta say the man knows his stuff. He is an expert. And you know what they say Trust is the name of the game. Experience talks wealth whispers.

AMD's Defense: It's All About the EPS

AMD CEO Lisa Su is defending the deal saying it'll boost their adjusted earnings per share. She argues it's a strategic partnership that goes beyond a regular commercial agreement. They are placing bets on who they think are going to be the winners in AI innovation going forward. And as Meta puts billions of dollars' worth of AMD GPUs into its data centers AMD will benefit from that increased revenue scale and ecosystem maturity. It's a win win for the shareholders says Lisa Su. Time will tell if that's true.

Is it a Bold Move or a Desperate Play?

Let's face it the AI market is a gold rush and everyone's trying to get a piece of the action. For Meta it makes sense to secure chips from multiple sources. But for AMD giving away equity is a risk. It could pay off big time if Meta becomes a dominant force in AI. Or it could backfire if AMD ends up diluting its shareholders for nothing. It's a gamble plain and simple. "You either run from things or you face them Mr. White." let's hope AMD faces it successfully

The Final Verdict

So what's the bottom line? AMD's deal with Meta is a bold move no doubt. But it's also a reminder that Nvidia is still the top dog in the AI chip game. Only time will tell if AMD's gamble pays off. In the meantime I'll be watching from the sidelines ready to help anyone who needs a good lawyer or some financial advice. Because as I always say "I fight for *you* Albuquerque" (and the rest of the world too!).