MARKET RECAP
🚀 AMD Jumps 26% As the AI Trade Shifts From GPUs to CPUs

🤩 What a dramatic turnaround from where we were in March!

✨ After four brutal weeks of war-driven losses, markets have gone on an incredible 6-week rally, hitting new all-time highs. Across the indexes:

• The S&P 500 rose +2.33%

• The Nasdaq 100 rose +5.50%

• The TSX rose +0.55%

💼 And it’s not just stocks doing well. In the job market, the US added 115,000 jobs in April vs. ~65,000 expected, with unemployment holding steady at 4.3%, despite consumer sentiment hitting record lows.

🏆 One of the biggest winners this week was AMD, which soared a massive 26% after earnings, bringing it to +104% year-to-date gains, and passing Exxon Mobil and Visa to become the 14th largest company in the S&P.

🔍 But before we deep dive into AMD as our feature story (and also cover everything you need to know about the ongoing Musk vs OpenAI trial), here’s a quick recap of the big picture in the market:

🕊️ Operation Epic Fury Is “Concluded”

💣 First, a quick update on the war. Starting on Tuesday, President Trump announced a pause to operation “Project Freedom” (which began on Sunday to escort ships through the Strait of Hormuz), stating “great progress” toward a “complete and final agreement” with Iran.

🤝 That same day, U.S. Secretary of State Marco Rubio said Operation Epic Fury (the US codename for the war in Iran) was “concluded,” and that a 14-page memorandum of understanding (MOU) had been brought to Iranian officials detailing the next steps toward a complete ceasefire and reopening of the Strait.

⚠️ Now, it’s worth noting Iranian President Masoud Pezeshkian has called the demands in the agreement “impossible,” and said that the U.S. was expecting Iran to submit to one-sided conditions… but with Chinese Foreign Minister Wang Yi also pushing for the ceasefire, all hands are on deck to bring the conflict to a close:

🔒 While the Strait of Hormuz is still closed, hopes are high ahead of Trump’s state visit to China next week, which is set to focus on Iran.

🚢 In fact, Qatar (which supplies nearly a fifth of global LNG) is already attempting to sail its first LNG tanker through the Strait of Hormuz, which could mark a turning point if it passes without incident.

🤞 With now 10 weeks in a row of covering the war, it seems the end is finally in sight (fingers crossed).

🦠 A COVID-2.0 Scare

🚨 Beyond the war, the market had a quick “COVID 2.0” scare after news of a hantavirus outbreak aboard a cruise ship that resulted in 3 dead went viral on social media, with traders on Polymarket briefly pricing a 40% chance of another global pandemic.

🔬 But on a closer look, it looks like the fears got way overblown, with the World Health Organization saying this particular strain has only infected roughly 3,000 people in its entire history, requires close, prolonged contact to spread, and cannot transmit through the air.

🎲 The Polymarket odds have since plummeted to 7% after the WHO stated clearly that it is ‘not the next COVID’.

🖼️ Now that we’ve covered the big picture, let’s dive into the most exciting story this week, AMD’s insane 26% stock jump. But first, a quick word about how you can become a Blossom shareholder!

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BIG TECH EARNINGS
🚀 AMD Jumps 26% As the AI Trade Shifts From GPUs to CPUs

😬 The day before AMD reported earnings HSBC, a prominent investment house, downgraded the stock from Buy to Hold, saying "upside is limited" and arguing that AMD's CPU growth was capped by foundry capacity constraints…

📈 Well… safe to say they were very, very wrong. Advanced Micro Devices ($AMD) blew past estimates and jumped 26% this week.

🤿 So let's break down what the bears missed… and whether the bulls are getting ahead of themselves…

💰 AMD Earnings

📊 By the numbers:

• ✅ Revenue hit $10.25 billion vs. $9.89 billion expected, up 38% year-over-year

• ✅ Adj. EPS hit $1.37 vs. $1.29 expected, up 43% year-over-year

• ✅ Data Centre revenue hit $5.8 billion vs. $5.64 billion expected, up 57% year-over-year

🔭 For Q2, AMD is targeting revenue of $10.9 billion to $11.5 billion, well above the $10.52 billion Wall Street had expected.

🤖 The CPU Comeback

🤔 So what did the HSBC analyst miss? CPUs.

💡 Unlike Nvidia ($NVDA), which focuses mainly on GPUs, AMD has a large CPU business with 34% market share (2nd to only Intel, which has over 60%)

⚙️ And unlike GPUs, which are used for training the models, CPUs are used to host and run AI applications once they’re built. And with the AI industry slowly shifting from building AI to deploying it, the need for CPUs is growing, driving huge growth for AMD.

💬 AMD’s CEO explained the logic directly:

📈 According to Su, the company now expects the server CPU addressable market to grow more than 35% annually, reaching over $120 billion by 2030, up from the 18% yearly growth rate it forecasted in late 2025. And Su believes the company can capture over 50% of the CPU market (from 34% today):

🎯 Goldman’s Jaw-Dropping Upgrade

⭐️ With the incredible results, AMD saw a bunch of earnings upgrades. Goldman captured the biggest headlines by raising its price target from $240 to $450.

🤖 Goldman’s core argument is that agentic AI creates an entirely new demand cycle that AMD is uniquely positioned to capture, both through its GPU business and, increasingly, through CPUs.

💬 According to Goldman's James Schneider, AMD will be "at the heart of the next stage of AI expansion", a big shift from Goldman’s stance before, which was much more neutral on the company.

🎯 But Goldman was far from the only analyst raising targets:

• KeyBanc raised its price target from $330 to $530

• Barclays raised from $300 to $500

• TD raised from $290 to $500

• Bank of America raised from $310 to $450

🤑 After the upgrades, AMD is now rated a ‘strong buy’ across analysts. But before you sell the house and invest it all in AMD, let’s talk about the arguments against Wall Street’s new golden child.

⚠️ A Word of Caution

🇨🇳 While CPUs are growing, the main concerns come from AMD’s GPU business, which actually shrank in Q1, after falling China-related revenues.

👀 AMD’s valuation is pricing in a GPU comeback that depends largely on the MI450, a next-generation chip that hasn't shipped yet. Citi analyst Atif Malik stayed neutral specifically because of this, saying he's waiting to see "the release and success of its next gen GPU product MI450 and Helios racks."

💡 Doubters also call out that AMD's big GPU contracts with Meta and OpenAI are structured as warrants, up to 320 million shares combined, vesting based on actual deliveries and performance thresholds and that shipments only begin in the second half of 2026.

😬 Beyond the GPU doubts, there’s also valuation concerns. AMD has soared 321% over the past year to $455, which sits above even most of the newly increased analyst price targets.

💡 So to sum it up, the CPU story is real, and this was a genuinely impressive quarter. But at the current price, some say the market is already pricing in the success of both CPUs and GPUs, and the GPU story is a bit more uncertain.

🙋‍♂️ Very curious about everyone’s thoughts on this, especially @bdinvesting, whose #1 position is AMD… so make sure you join the discussion on Blossom!

🧑‍⚖️ All right, let’s switch gears to a recap of the Musk x Open AI lawsuit drama, but first a quick word from our sponsor this week Harvest ETFs!

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AI GIANTS BATTLE
🧑‍⚖️ A Breakdown of the Musk vs OpenAI Trial and What it Means for OpenAI’s IPO

👊 While the war and big tech earnings have dominated headlines, two billionaires have been battling in court over the future of OpenAI: Elon Musk and Sam Altman.

🏛️ As a quick recap: Musk co-founded OpenAI with Altman back in 2015 as a nonprofit, with a mission to keep powerful AI out of the hands of big tech, donating $38 million to get it off the ground. But last year, OpenAI converted to a for-profit structure and is now valued at $800 billion.

🧑‍⚖️ Musk is suing for $150 billion, arguing that Altman betrayed the original mission, pushing to have the conversion reversed and Altman removed.

🫣 Well, two weeks in, and things are not looking too good for Musk. Here’s the play-by-play:

• 🪐 Brockman, OpenAI's co-founder, took the stand and said that Musk wanted to become OpenAI's CEO because he needed $80 billion to build a city on Mars. Brockman also claimed that Musk threatened to make him and Altman "the most hated men in America" when he had privately suggested both sides settle before trial.

• 😬 Then Shivon Zilis, a former OpenAI board member (who also happens to be the mother of four of Musk's children), testified that Musk himself was the one who first floated converting OpenAI to a for-profit.

• 🤖 And then Musk himself admitted it on the stand that his own AI company, xAI, has been using OpenAI's models to train its competing chatbot Grok, in direct violation of OpenAI's terms of service.

🤔 Legal experts give Musk low odds of winning (with Polymarket pricing it at a 9% chance). But drama aside, the trial has done something arguably more valuable. It's forced OpenAI to open its books in public for the first time, right before it goes public.

👀 What the Trial Reveals About OpenAI Pro-IPO

💰 As we’ve covered before, OpenAI is planning to go public, with Altman targeting a Q4 2026 IPO at a $1 trillion valuation. And by putting the company's finances on trial, Musk has forced OpenAI to defend its books.

📉 What's come out isn't pretty. The company missed its own internal target of 1 billion weekly active ChatGPT users by the end of 2025, and still hasn't hit it. Annualized revenue cleared $20 billion last year against an $852 billion private valuation, roughly 42x revenue, with the company saying it won't be profitable until 2030.

📄 Outside of the trial, leaked internal documents revealed that OpenAI’s CFO Sarah Friar warned that OpenAI is on track to lose $14 billion in 2026 alone and is pushing to delay the IPO to 2027 (but is being overruled by Sam Altman).

🥊 There’s also growing competitive threats. ChatGPT's share of AI chatbot web traffic has dropped from 86.7% to 64.5% in the past year, while Google's Gemini has grown from 5.7% to 21.5% over the same period.

😬 In the enterprise market, Anthropic just overtook OpenAI in revenue, hitting a $30 billion run rate this April, and winning an estimated 70% of new business deals. OpenAI is heading into a public listing while quietly losing ground on two fronts.

⚠️ So all that to say, while Big Tech and AMD earnings show the AI market at large may still be soaring, as we discussed last week, we’re entering a ‘not everyone is going to win stage’ and OpenAI has a lot to prove to show that it deserves a place among the winners.

FROM THE BLOSSOM COMMUNITY
⭐️ Top Discussions of the Week

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