• May 7, 2026

Yesterday I appeared on CNBC’s Power Lunch to discuss AMD’s strong earnings and Arm’s prospects in the datacenter chip market. You can watch an edited video of this conversation via the link below, or read on for an AI-generated, human-edited overview and summary of the discussion.

Link to edited segment.

Overview

AMD reported strong earnings, driven by a sweep of successful metrics and an expanded total addressable market for its CPUs. While AMD is gaining unit share in the datacenter, competition remains fierce from NVIDIA, Intel, and Arm. Arm is shifting from a licensing-dominated model to capturing higher design margins with its AGI series, aiming for significant revenue growth by 2031 by serving the hyperscaler market. Despite NVIDIA’s long-term dominance in AI and robotics, it has recently underperformed compared to broader semiconductor indices, partly due to its massive market cap and high investor expectations already being priced in for future years.

Outline

AMD Earnings and Market Position

• Brian Sullivan of CNBC introduces AMD as the primary stock story of the day following an earnings report that received an A plus grade.
• Patrick Moorhead explains that the market is reacting appropriately because AMD doubled its total addressable market for CPUs and achieved a clean sweep of earnings.
• Moorhead highlights the upcoming MI 450 GPU as a significant future offering and notes that revenue growth in the datacenter came from increased unit volume rather than price hikes.
• Sullivan asks whether AMD can successfully execute and capture the expanded addressable market despite the positive numbers.
• Moorhead expresses confidence in CEO Lisa Su’s track record of execution while acknowledging stiff competition from NVIDIA, Intel, and Arm.

Arm Holdings and the Licensing Model

• Sullivan shifts the focus to Arm Holdings, noting that it often receives less media attention than its peers despite its influence in the chip space. He asks for clarification on how Arm collects royalties from other chip manufacturers that do not use the Arm brand name.
• Moorhead explains how Arm licenses its intellectual property to hyperscalers that design custom chips, traditionally earning a few hundred dollars per chip.
• Moorhead adds that the new AGI series of chips allows Arm to capture higher design margins, potentially reaching thousands of dollars per chip.
• He projects that Arm’s revenue could grow from its current levels to $15 billion by 2031 and eventually $25 billion as it captures more intellectual property value.

NVIDIA Performance and Future Outlook

• Sullivan points out that NVIDIA has surprisingly been one of the worst-performing stocks in the semiconductor index this year, lagging the SMH ETF by 40 percentage points.
• Moorhead argues that NVIDIA remains a good investment but notes that institutional investors may find its massive market cap difficult to move.
• He suggests that NVIDIA’s projected performance for 2026 is likely already priced in, meaning investors are now looking toward 2027.
• Moorhead observes that while hyperscalers like Google and AWS are developing their own silicon, the global demand for compute power seems insatiable.
• Moorhead concludes that NVIDIA has significant long-term potential in emerging fields such as industrial IoT and robotics.

Companies Mentioned

• AMD
• Arm Holdings
• NVIDIA
• Intel
• TSMC
• Microsoft
• AWS
• Google

Keyword Summary

AMD, Arm Holdings, CPU, data center, GPU chips, hyperscalers, chips, semiconductor index, compute demand

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