AMD Benefits From Nvidia's Troubles, Smart Money Sells Nvidia; Cooler PPI; Bitcoin Below $70K

AMD To Benefit

Please click here for an enlarged chart of Advanced Micro Devices Inc (NASDAQ:AMD).

Note the following:

• This article is about the big picture, not an individual stock.  The chart of AMD stock is being used to illustrate the point.
• The chart shows AMD has rallied from a low of $402.10 to $570.80 as of this writing in the premarket, reaching the low band of zone 1 (resistance).
• The chart shows when our buy signals were given for the trade around position on AMD.  A trade around position is a technique used by hedge funds to dramatically increase profits while reducing risks.
• The chart shows the Arora signal this morning to take profits and exit the AMD trade around position.  The reason is AMD reaching the low band of the resistance zone.
• The chart shows our buy zones for the AMD core position.  As full disclosure, AMD is in our portfolio, long from an average of $205.52, representing a gain of 178%.
• Nvidia’s troubles are creating an opportunity for AMD.  Large AI customers have relied heavily on NVIDIA Corp (NVDA), but uncertainty surrounding its leadership may prompt them to look more seriously at AMD.
  • AMD is better positioned than it was a year ago.  Meta Platforms Inc (META) has installed AMD Helios systems, and AMD says OpenAI, Anthropic, Microsoft Corp (MSFT), and Oracle Corp (ORCL) are running workloads on Helios.
  • AMD’s data center revenue jumped 97% year-over-year in the latest quarter.
  • AMD is becoming more competitive on performance.  In tests announced November 12, AMD reported up to 30% higher inference throughput per GPU than Nvidia’s Vera Rubin on a specific DeepSeek-R1 benchmark.
  • CUDA remains a major Nvidia advantage.  AMD is improving its ROCm software and working with Anthropic to use Claude to accelerate software development and optimize workloads for AMD GPUs.
  • Previously, moving away from CUDA required extensive manual work by skilled engineers.  AI coding tools can now handle much of the code conversion and help identify compatibility issues.  Testing and optimization are still necessary, but migration is becoming easier and less expensive.  This could gradually weaken Nvidia’s software advantage.
  • Even customers that remain loyal to Nvidia may buy more AMD chips to reduce dependence on one supplier and negotiate better prices.
• The tentative plan is to start a new AMD trade around position either on a substantial pullback or a decisive breakout above zone 1 shown on the chart.  Note, trade around positions are separate and distinct from core positions.
• The plan is to continue to hold the core AMD position.
• The momo crowd bought NVDA stock extremely aggressively yesterday.  Aggressive NVDA buying continued after hours yesterday and is continuing in the premarket today.
• Prudent investors should note that while momo crowd money flows are positive in NVDA, smart money flows are negative.  
• The momo crowd is buying NVDA stock because the long bull market has conditioned them to buy every dip.  As usual, the momo crowd is not doing deep 360 degree analysis of Nvidia’s future but is latching onto a simple narrative of low forward PE. The point the momo crowd is missing is that the forward earnings estimates are at risk without the visionary leadership of Jensen Huang and are also at risk due to the potential restrictions on exports to China and increasing competition.  As an example of competition, Cerebras Systems Inc (CBRS) announced a deal with Microsoft yesterday.  Cerebras already has deals with Amazon.com, Inc. (AMZN) and Oracle.
• Of special note is a report that Nvidia is already planning to slow down deals it has been making to finance the AI industry.  A slow down in financing from Nvidia has major negative implications for the AI trade.  
• Smart money continues to sell NVDA stock into the strength.  For the reasons, please see yesterday’s Morning Capsule.
• Applied Materials, Inc. (AMAT), one of the largest manufacturers of semiconductor equipment, announced earnings better than consensus and whisper numbers.  Yet, AMAT stock is being sold on concerns that down the road, Huang leaving Nvidia may result in lower demand for semiconductors than previously anticipated.
• Prudent investors should note AMAT is a leading indicator of future semiconductor demand.  As full disclosure, AMAT is in our portfolio, long from an average of $16.  It is trading at $378.88 as of this writing in the premarket, representing a 2268% gain.
• Producer Price Index (PPI) came cooler than expected.  Cooler PPI has trigger buying in stocks, bonds, gold, silver, and bitcoin.  However, prudent investors should note that on a year-over-year basis, Core PPI is up 4.9%.  The Fed’s target is 2% inflation based on PCE.  Here are the details:
  • Headline PPI came at 0.3% vs. 0.4% consensus.
  • Core PPI came at 0.3% vs. 0.3% consensus.
• In our analysis, in spite of cooler PPI data, the probability of the Fed raising interest rates in December is 80%. 

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Amazon (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA), Alphabet Inc Class C (NASDAQ:GOOG), Meta (NASDAQ:META), Tesla Inc (NASDAQ:TSLA), and Apple Inc (NASDAQ:AAPL).

In the early trade, money flows are negative in Microsoft Corp (NASDAQ:MSFT).

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Gold

Gold continues to trade below $3900 but is seeing buying after PPI release.

Bitcoin

Bitcoin (CRYPTO: BTC) is seeing selling and is now under $70K.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. Most recently, we correctly called the rally from recent stock market lows and the 2026 semiconductor decline before a 25% drop in the Semiconductor ETF (SMH). In gold, we bought at an average price near $1,105, close to cycle lows, and took partial profits near $5,400, close to cycle highs. Please click here to get our free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.