Needham sees AMD-Anthropic deal raising odds of more Riot Platforms leases

Nvidia agreed to invest in AI lab Nous Research to support both open-weight and proprietary model development, while Microsoft introduced the Surface Laptop Ultra featuring Nvidia's new RTX Spark processor for on-device AI workloads. The RTX Spark chip brings Nvidia's AI-focused graphics hardware into thinner consumer and enterprise laptops beyond data center servers. Nvidia, a US-based semiconductor group with a market value of about $5.6 trillion, is stretching its AI reach from hyperscale facilities into consumer and enterprise hardware. The company is putting capital behind Nous Research so that whether enterprises adopt open-weight assistants like Hermes Agent or closed models, they are more likely to run on Nvidia hardware and software. Near-term checks include how many OEMs follow Microsoft in shipping RTX Spark based laptops and whether Nvidia discloses concrete Nous related deployments into enterprise workflows, with updates through 2027 on agent safety platform adoption and the US$1b super intelligence commitment.

Advanced Micro Devices reported fiscal Q2 2026 Data Center revenue more than doubled, up 107% to $6.7 billion, a segment that now accounts for 58% of company sales. The company said Meta, Microsoft, OpenAI, Oracle, and Anthropic are among those deploying its Helios rack system, which combines Instinct GPUs, EPYC CPUs, and networking, and a recent partnership with Anthropic covers up to 2 gigawatts of MI450 GPUs in Helios racks. Non-GAAP gross margin reached 56% and non-GAAP operating margin hit 27%, helped by an easy comparison against the year-ago quarter's $800 million in charges tied to US export controls on a data center GPU, while non-GAAP earnings per share came in at $1.66 versus $0.48 a year earlier. Management guided fiscal Q3 revenue to about $13 billion, plus or minus $300 million, and expects Data Center sales to accelerate in the second half, though the largest commitments, including Anthropic's, are multiyear deployments rather than revenue already booked. Client revenue rose 23% to $3.1 billion, gaming fell 31% to $779 million on weaker semi-custom sales, capital expenditures reached $808 million, and free cash flow was $1,558 million, down from $2,566 million in fiscal Q1. Investors are paying 85.60 times forward earnings as of October, against a sector multiple of 23.74 and AMD's own five-year average of 39.90, with earnings per share expected to grow 107.2% in 2027.

Nvidia reported a quarter in which revenue more than doubled, with Data Center revenue reaching $89.0 billion in fiscal Q2 2027, up 117% from a year earlier, while gross margin held at 75.0% on both a GAAP and non-GAAP basis. Management guided fiscal Q3 revenue to $108.0 billion, plus or minus 2%, up from the $96.2 billion just reported, and said the next-generation Vera Rubin platform is in full production with racks running at partners including CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure, and Nebius. Nvidia also announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR on financing platforms meant to mobilize over $500 billion of outside capital, subject to definitive agreements, and returned about $26.0 billion through buybacks and dividends in the quarter, backed by a remaining share repurchase authorization of nearly $99 billion. The company guided fiscal Q3 gross margin to 74.0%, plus or minus 50 basis points, a modest step down from the 75.0% it just delivered, and the outlook assumes no data center compute revenue from China. On forward earnings, Nvidia trades at 25.67 times, against a sector multiple of 23.77 and its own five-year average of 42.20, while analysts expect earnings per share to grow 69.66% in 2027.

Microsoft expanded its collaboration with Nvidia and unveiled a new generation of AI-powered Windows PCs, including the Surface Laptop Ultra powered by Nvidia's RTX Spark chip, which starts at $2,599 and becomes available on October 16 alongside Nvidia-powered AI PCs from Dell, HP, Lenovo and other manufacturers. Microsoft also announced the Nvidia-powered Surface RTX Spark Dev Box for developers and AI engineers, expected to ship in November at a starting price of $5,999. In its most recent fiscal fourth quarter, Microsoft reported revenue of $90 billion, up 18% year over year, while adjusted earnings climbed 23% to $4.74 per share, and the Zacks Consensus Estimate calls for current fiscal 2027 revenue to climb 17% to $390.2 billion with earnings up 9% to $19.65 per share. The FY27 EPS consensus is slightly up over the past 60 days from $19.63 to $19.65, while FY28 estimates have dipped from $23.30 to $23.24, and Microsoft stock trades at 27X forward earnings, above its Zacks Computer-Software industry average of 16X. Microsoft stock currently lands a Zacks Rank #3 (Hold), with shares up 9% year to date.