1 Unstoppable Semiconductor Stock to Buy Instead of AMD

Advanced Micro Devices (AMD) surged 23.7% following news that OpenAI is acquiring up to a 10% stake and plans to procure 6 gigawatts (GW) of AMD Instinct MI450 GPUs, with initial deployment in late 2026. This deal is part of OpenAI's broader strategy to build 10 GW of AI data centers, involving diversified partnerships with multiple chipmakers like Nvidia and Broadcom, and cloud providers such as Oracle and Microsoft. For investors seeking a foundational play in the AI infrastructure boom, the article highlights ASML Holding, which holds a monopolistic position in critical EUV photolithography equipment essential for all advanced chip manufacturing, as a compelling long-term opportunity less susceptible to individual chipmaker market share fluctuations.

Analysis

Advanced Micro Devices (AMD) surged 23.7% following news of OpenAI's intent to acquire up to a 10% stake and procure 6 gigawatts (GW) of AMD Instinct MI450 GPUs, with initial deployment slated for H2 2026. This significant deal positions AMD as a key supplier within OpenAI's broader 10 GW AI data center build-out, which also includes strategic partnerships with Nvidia, Broadcom, Oracle, and Microsoft, indicating a diversified supply chain approach rather than exclusivity.

The article highlights a strategic shift towards foundational AI infrastructure plays, exemplified by ASML Holding. ASML maintains a monopolistic position in extreme ultraviolet (EUV) photolithography machines, which are critical for manufacturing advanced chips by companies like Taiwan Semiconductor Manufacturing (TSM) for AMD, Nvidia, and Broadcom. This makes ASML an integral, upstream beneficiary of sustained AI investment, irrespective of specific chipmaker market share fluctuations.

ASML's EUV machines, costing hundreds of millions and requiring extensive logistics, are increasingly vital for handling growing AI chip volumes. As ASML ramps up production, EUV sales are expected to drive margin expansion and revenue growth, reinforcing its long-term investment thesis. While AI stock valuations are currently elevated, ASML's unique market position offers resilience against potential downturns and competitive pressures, making it a less volatile proxy for AI growth.

Key Decisions for Investors

• Investors holding AMD should monitor the execution of the OpenAI deal and AMD's competitive positioning within OpenAI's diversified supplier strategy.
• Consider ASML Holding as a foundational, long-term investment in the AI infrastructure theme, given its monopolistic position in critical chip manufacturing equipment and reduced exposure to individual chipmaker market share shifts.
• Adopt a multi-year investment horizon for AI-related stocks, acknowledging current high valuations and the necessity for massive AI spending to translate into tangible returns to justify future growth.