Episode summary
AMD Suffers Worst Rout Since 2018 on Disappointing Forecast | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu, John Tucker · Guests: Kunjan Sobhani, Sam Fazeli, Woo Jin Ho, Jody Lurie
Summary
AMD’s selloff was framed as a valuation and expectation problem rather than a broken business. A guest said there was “nothing fundamentally wrong” in the report, but the market had priced in so much AI optimism that AMD’s beat looked modest once China revenue was excluded from guidance. He said AMD’s CPU story is improving, its GPU effort remains intact, and the real test for its server-level AI offering will not come until 4Q 2026. On China, he noted that export licenses differ by chip and that newer products still have not received formal approval.
Texas Instruments’ planned $7.5 billion purchase of Silicon Laboratories was described as unusual in size but strategically useful, filling a wireless connectivity gap in industrial IoT and helping TI use its expanded manufacturing base more efficiently. The same guest said investors are still waiting for proof that broad AI capex will monetize.
On pharma, Eli Lilly was portrayed as better positioned than Novo Nordisk because its weight-loss drugs appear to deliver stronger durable efficacy and more convincing volume growth into 2026. The host and guest also discussed competition from compounding and upcoming oral obesity drugs. In hardware, HP’s CEO departure surprised the guest, while higher DRAM costs were said to threaten PC margins. Super Micro’s AI server demand beat expectations, but margin pressure remains the key offset. Yum Brands, meanwhile, was said to lean on Taco Bell and international KFC, with Pizza Hut under review and experience spending still strong for Disney-related travel and cruises.
Key takeaways
- The guest said AMD’s drop reflected impossible expectations, not a broken core business, and pointed to 4Q 2026 as the real execution test.
- Texas Instruments’ $7.5 billion Silicon Labs deal was described as a rare-sized acquisition that strengthens industrial IoT and could improve factory utilization.
- The guest argued Eli Lilly looks better than Novo Nordisk because its obesity drugs show stronger longer-term weight loss and more credible 2026 volume growth.
- HP faces margin pressure from DRAM and storage costs rising from about 10-15% of build costs to 20-30%, according to the guest.
- Super Micro’s AI server demand was strong enough to drive a roughly $1.5 billion sales beat, but operating margin near 4.5% remains the key concern.
Notable quotes
“there was nothing fundamentally wrong in in this report. uh there were a lot of good things to take away”
“this is sort of this size of the deal they have not done in the past. Uh, the last time they did a deal like this was buying national for about $67 billion in 2011”
“I think this would be helpful to uh both people users and the pharma companies”
“We really have to wait until the 4Q 2026. This is when they will be really put to test if they can really execute their first server level solution or not”
How the episode opens
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I'm going to start, John, with uh AMD. That stock, that story really got my attention. It's down 16.5% today.
today. I mean, this was one of the darling tech stocks, the chip names that were really riding the uh AI wave here and it's at its worst day since 2017. Stocks up 70% over the trailing 12 months, been taking a big hit today.
So, let's figure out what's going on in that part of the world. Kunjan Sabani joins us, senior analyst covering the semiconductor companies, Bloomberg Intelligence. He's based in our Los Angeles office.
Kjan, is this an overreaction for AMD? Is there something fundamentally problematic there? Uh there was nothing fundamentally wrong in in this report.
uh there were a lot of good things to take away but it comes down to you know when you become an AI darling you set up really really high expectations and uh when you take out the China revenue which was not included in the guidance and the expectations the beat came out pretty modest which I guess people didn't like and didn't was not at par against the really high expectations that you have now every quarter from these companies
Like they used to ask in the old westerns uh you know is there room enough for the two of us in this town Is there room enough for for them and Nvidia? — Uh there is right now. I mean look the all the tide is lifting all boats.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amd earnings
- semiconductor m&a
- ai data center servers
- obesity drug demand
- credit market outlook
Companies and tickers mentioned
- AMD
- TXN
- SLAB
- LLY
- SMCI
- HPQ
- YUM
- DIS
- PYPL
- Advanced Micro Devices
- Texas Instruments
- Silicon Laboratories
- Eli Lilly and Company
- Super Micro Computer
- HP
- Yum Brands
- Walt Disney
- PayPal
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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