There’s a structural shift taking place in AI that investors may be missing. How to play it
Advanced Micro Devices has recently transformed from emerging artificial intelligence supplier to validated infrastructure partner with its recent deal with Meta , and the market is only beginning to price in what that means. For the past two years, AMD was viewed as a technically capable challenger in artificial intelligence, but one that remained largely unproven at hyperscalers. While its MI300 accelerators gained early traction, most deployments were limited to pilot programs and mixed environments rather than full platform adoption. This agreement with Meta confirms that its hardware can operate at the highest tier of global AI infrastructure. At the same time, this validation arrives as Wall Street continues to underestimate the next phase of artificial intelligence. Most forecasts still focus primarily on training workloads. However, the dominant long-term driver of AI spending will be inference, the ongoing compute required to run millions of autonomous, agent-based systems continuously. As agentic AI adoption accelerates, inference demand will grow exponentially. That shift is only beginning to be understood by investors, creating a structural opportunity for companies like AMD positioned at the center of large-scale inference infrastructure. Trade timing & outlook After breaking out above $200 in October 2025, AMD has now firmly retested that level as support following its recent pullback. Holding above $200 opens the path toward a retest of the $240–$270 zone, which marks the upper end of its recent trading range. The recent bounce following the Meta announcement reflects a shift from consolidation to renewed upside momentum. Fundamentals AMD’s growth profile remains compelling relative to its industry peers: Forward P/E: ~31x vs. Industry ~33x Expected EPS growth: ~49% vs. Industry ~31% Expected revenue growth: ~34% vs. Industry ~13% Net margins: ~12.5% vs. Industry ~16.6% While margins remain below some peers, AMD’s superior growth trajectory reflects its increasing exposure to high-value data center and AI workloads. As large-scale deployments ramp, operating leverage should improve materially over time. Bullish thesis Hyperscaler validation: The Meta partnership marks AMD’s first full platform validation at multi-gigawatt scale, confirming its ability to deliver rack-level AI systems for the world’s largest cloud operators. Inference demand inflection: Wall Street continues to model AI demand around chatbots. However, agent-driven systems will require continuous inference at scale, creating sustained infrastructure demand that favors diversified suppliers. Revenue visibility: Multi-year commitments from hyperscalers meaningfully reduce AMD’s historical earnings volatility and increase long-term cash flow visibility. Margin expansion: Q4 2025 gross margins reached 57%. As software and development costs are amortized across larger deployments, operating leverage should accelerate. Options trade To express a bullish view with defined risk, I’m looking at: Buying the April 17, 2026 $210 / $260 Call Vertical @ $16.06 Debit This entails: Buying the April 17, 2026 $210 Call Selling the April 17, 2026 $260 Call Maximum risk: $1,606 per contract if AMD is below $210 at expiration Maximum reward: $3,394 per contract per contract if AMD is above $260 at expiration Breakeven: $226.06 View this Trade in OptionsPlay for Updated Pricing This options structure targets a continuation toward the upper end of AMD’s trading range while limiting capital at risk to just 7% of the stock’s value. Summary Advanced Micro Devices is no longer simply an emerging AI supplier. With the Meta partnership, it has become a validated infrastructure partner capable of operating at hyperscale. At the same time, the market continues to underestimate how rapidly inference demand will expand as autonomous AI systems proliferate. As investors begin to model AI more like infrastructure than software, companies positioned at the center of deployment will benefit disproportionately. For those looking to participate in the structural growth of AI infrastructure with defined downside, AMD represents an increasingly credible alternative to the dominant incumbent. DISCLOSURES: Zhang has a position in AMD. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. 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