The last post focused on the explosive demand for CPUs, fulfilling its mission, and as expected, we have seen a significant surge. Last time, AMD's price was still at $280, and today it has risen to $409, with an increase of 46% in just half a month! From the latest conference call with Lisa Su, it appears that the future demand for GPUs and CPUs will be in a 1:1 ratio, further confirming our previous prediction: "By 2030, 75% of AI computing demand will come from inference, and the CPU market will experience a major explosion."

After viewing the Q1 2026 report released by #AMD today, my most intuitive feeling is that the wind has changed. If the past two years were a showcase of "large model training," we have now officially entered the explosive period of "AI agents and inference." In this stage, the CPU, which was originally viewed as a "supporting role," is reclaiming its spotlight.

1️⃣ Logic Reconstruction: The CPU Ratio Logic Has Changed!

In the past, data centers typically had 1 CPU for every 8 GPUs, with the CPU serving as a supporting role that was responsible for issuing commands and delivering data.

However, in this earnings report, Lisa Su mentioned that the pressure on CPUs in inference and agent scenarios greatly exceeded expectations.

Agents are not simply question-and-answer entities; they require task orchestration, breaking down steps, and calling plugins—all tasks the CPU handles.

Thus, in the current high-density AI environment, the ratio of CPUs to GPUs is evolving from 1:8 to 1:1, or even higher.

AMD has directly adjusted the market expectations for server CPUs from an 18% compound annual growth rate to 35%, with a market size projected to reach $120 billion by 2030. This adjustment is quite interesting.

2️⃣ The Earnings Report Is Quite Impressive: It's Not Just Growth, It's a Qualitative Change

This time, AMD's data is indeed strong, with a record revenue of $10.3 billion (a year-on-year increase of 38%) being just the surface; what excites me as an investor is the underlying financial quality:

Profit margins achieved a "Davis Double," with gross margins rising to 55% and free cash flow tripling. This indicates that AMD is selling increasingly high-end products, gaining stronger market power.

The data center has become the absolute core, with revenue share and growth almost entirely relying on data centers (up 57% year-on-year). Previously, everyone thought AMD started with PCs; now it has completely evolved into a high-performance AI infrastructure company.

Additionally, Meta gave a massive order at the 6GW level, still for the multi-generation custom MI450, indicating that in the eyes of top customers, AMD is no longer a backup option, but a first choice.

3️⃣ Moat: From "Solo Operations" to "Rack-Level Full Package"

I noticed Lisa Su mentioned a key term: "Helios Architecture."

This is AMD's trump card, combining its strongest EPYC CPUs (Verano series) and Instinct GPUs (MI450) into a rack-level solution that is delivered directly.

In comparison, while Intel is also catching up, there are still gaps in process and ecosystem integration; the ARM solution, although power-efficient, cannot compete with AMD's x86 performance monster when handling complex, high-throughput AI orchestration tasks.

4️⃣ There Is a Little Risk ⚠️

Memory prices have skyrocketed, and HBM4 and high-end memory are too expensive, leading to significant cost pressures. The gaming business is expected to decline by more than 20% in the second half. Although Lisa Su said they can manage the supply chain, this aspect has indeed been cut.

In summary, I personally hold a long-term positive outlook on the logic and direction of CPU development. AMD has transformed from a low-cost alternative into a high-performance definitional leader. Lisa Su's EPS target of over $20, given the current growth momentum (with Q2 expected to rise by 46%), does not seem like an empty promise.

Look out for AI activities advancing in July, where there will be more details on the 2nm Zen 6 architecture CPU and MI450.

If you, like me, firmly believe that AI will evolve from chat boxes to a fully automated AI agent era, then AMD's dual-drive of CPU and GPU may represent a relatively stable explosion point in the current market.

Previously buying AMD was about buying potential, now buying AMD is about buying certainty. 🧐 Keep an eye on the CPU race, and there are other related positive companies, like #ARM and #INTC, DYOR 🙏

The companies mentioned above are generally available on #MSX, and for trading US stocks, I choose to use the #RWA US stock tokenization platform #MSX to invest and participate in the US stock market: http://msx.com/?code=Vu2v44

Early US stock investment fans and partners can message me privately; after filling out the form, you can enter the US stock discussion community for free (currently limited to 10 people per week, with assistant approval, which may take some time, thank you 🙏)!

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