AMD (ADVANCED MICRO DEVICES)

Red flags

• AMD relies on TSMC for all microprocessor and GPU wafers at 7nm or smaller nodes; a TSMC disruption could materially constrain its newest products.
• U.S. export restrictions led to approximately $800 million of MI308 inventory and related charges in the second quarter; only $360 million was reversed after licenses enabled some China shipments, leaving policy and potential revenue-sharing uncertainty.
• OpenAI received a warrant for up to 160 million AMD shares at a $0.01 exercise price. Against 1.636 billion diluted weighted-average shares, the maximum represents roughly 9.8% additional share count, subject to vesting conditions.
• Goodwill was $25.1 billion and acquisition-related intangible assets were $16.7 billion at year-end; scheduled intangible amortization is $2.2 billion in 2026, creating material earnings drag and impairment exposure.
• The majority of AMD’s ATMP services are provided by joint ventures with Tongfu Microelectronics, and AMD reported some inventory loss from a contract-manufacturer incident in the first quarter of 2024.
• Total inventory increased 38% year over year to $7.9 billion, while total debt rose to $3.25 billion from $1.75 billion, including $875 million due in 2026.