Key Highlights Advanced Micro Devices spearheaded a $350 million investment in TensorWave, a cloud computing company operating solely on AMD processors TensorWave’s valuation has reached $1.5
Advanced Micro Devices spearheaded a $350 million investment round in TensorWave, a Las Vegas-headquartered cloud infrastructure provider that operates exclusively on AMD hardware, according to a Wednesday report from the Wall Street Journal. The financing values TensorWave at $1.55 billion.
Advanced Micro Devices, Inc., AMD
Shares of AMD began Wednesday’s session at $475.51 and experienced a 3.4% decline in premarket activity as semiconductor stocks broadly retreated.
This strategic investment closely mirrors a playbook pioneered by Nvidia, which has provided financial backing to emerging cloud providers — including CoreWeave and Nebius — that deliver AI-focused cloud computing infrastructure powered entirely by Nvidia processors.
Such arrangements have attracted skepticism from market observers who characterize them as “circular financing” — capital flowing from chipmakers to startups that subsequently purchase hardware from those same semiconductor companies.
Morningstar analyst Brian Colello stated: “Nvidia’s partnership and investment with CoreWeave is…circular, or perhaps more of a web.”
Compared to Nvidia, AMD’s venture operates on a notably smaller footprint. TensorWave currently holds agreements for 500 megawatts of data center capacity and aims to expand to two gigawatts within the next twelve months. By contrast, CoreWeave already operates over one gigawatt and has set its sights on exceeding five gigawatts by the end of the decade.
Colello further commented: “Anyone scarred by the dot-com bubble bursting is keenly aware of the risks of a circular deal…we don’t think this risk is present today…but it bears watching.”
Analyst sentiment toward AMD remains generally favorable. The semiconductor company holds a Moderate Buy consensus rating, with Wall Street’s average price objective sitting at $419.86.
Morgan Stanley adjusted its price target upward from $360 to $410 in May while maintaining an equal weight stance. Sanford C. Bernstein elevated AMD from market perform to outperform and raised its target from $265 to $525. Benchmark increased its objective to $485 with a buy recommendation, while Citigroup adjusted its target to $460 alongside a neutral rating.
Institutional investors control 71.34% of AMD’s outstanding shares. Deutsche Bank expanded its AMD holdings by 35,432 shares during the fourth quarter, bringing its total stake to 9,124,413 shares valued at approximately $1.95 billion.
Chief Executive Officer Lisa Su divested 125,000 AMD shares on May 13th at a mean price of $445.51, generating approximately $55.7 million in proceeds. The transaction was executed under a predetermined Rule 10b5-1 trading arrangement and trimmed her holdings by roughly 3.97%.
Executive Vice President Paul Darren Grasby similarly sold 24,376 shares in early May at an average of $444.39 per share. Company insiders collectively disposed of 332,032 shares valued at around $118 million throughout the most recent quarter.
On a more optimistic note, AMD revealed plans to invest up to £2 billion across five years in the United Kingdom to advance AI development, establish research collaborations with prestigious institutions such as Imperial College London and the University of Cambridge, and expand workforce training programs.
AMD’s latest quarterly financial results showed earnings per share of $1.37, surpassing the consensus estimate of $1.29. Revenue reached $10.25 billion, exceeding the $9.90 billion forecast, and represented a 37.8% year-over-year increase.
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