AI trade energized by AMD guidance

Briefing.com Summary:

*AMD has injected some enthusiasm back into the AI trade.

*The House will hold a vote around 7:00 p.m. ET on the continuing resolution that will reopen the government.

*The president is considering a $2,000 rebate check for those making $100,000 a year or less.

The Nasdaq Composite declined 3.0% last week amid purported concerns about valuations and excess speculation involving the mega-cap stocks and growth stocks. Those concerns have seemingly been allayed based on the trading action so far this week, which is only two days old.

Entering today, the Nasdaq Composite is up 2.0%, and it is headed for more gains at the open, as are the other major indices.

Currently, the S&P 500 futures are up 26 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 167 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 124 points and are trading 0.3% above fair value.

Yesterday was a day of outperformance for the Dow Jones Industrial Average, which set a new closing high. Today the Nasdaq is poised to outperform, certainly at the open, fortified by leadership from the mega-cap stocks and energized by the AI trade.

The latter has been infused by Advanced Micro Devices (AMD), which held an Investor Day yesterday. It appears that there has been a delayed reaction to all the remarkable guidance provided by AMD at that event.

Specifically, AMD said it expects a compounded annual growth rate of 35% for revenues for the next three to five years, starting with a baseline of $34 billion in 2025, non-GAAP EPS exceeding $20.00, and that it expects $100 billion in data center revenue over the next three to five years, which translates into a 60% compounded annual growth rate. It sees a data center total addressable market of $1 trillion by 2030 as it confronts a “rate and pace of change in AI [that] is beyond anything it has seen.”

The kicker is that AMD closed down 2.7% yesterday and actually sold off after those updates were provided. Today the stock is indicated 6.5% higher in what we would describe as a strikingly inefficient response by the market. That is, today’s response should have been yesterday’s response if one is accepting of the idea that nothing changed overnight and that the rally today is predicated on yesterday’s news.

Other news today includes reports that the House will hold a vote around 7:00 p.m. ET on the continuing resolution that will reopen the government, that President Trump is considering a $2,000 rebate check for those who make $100,000 a year or less, and that the Fed, according to The Wall Street Journal, is divided over a December rate cut.

Separately, the Treasury market is back in action after being closed yesterday for Veterans Day. The 2-yr note yield is down two basis points to 3.57%, and the 10-yr note yield is down two basis points to 4.09% ahead of today’s $42 billion 10-yr note auction. Results will be announced at 1:00 p.m. ET.

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Originally Posted November 12, 2025 – AI trade energized by AMD guidance