Did you hear the news that AMD's stock price soared to $687 billion in just one day? It skyrocketed over 20% in after-hours trading following its earnings announcement in early May. But what's interesting is that this isn't just a simple stock surge news; it signals a reshaping of the global AI computing market landscape.

First, looking at the earnings figures, they are truly impressive. Revenue hit $10.2 billion, with net profit soaring 95% to $1.3 billion. And the really important part here is the data center segment. It generated $5.8 billion, accounting for 56.6% of total revenue, which means AMD is no longer just a CPU manufacturer but has transformed into a full-fledged AI computing company.

CEO Lisa Su's projection of the server CPU market reaching $120 billion by 2030 and increasing the compound annual growth rate to over 35% is a bold declaration. That indicates demand for AI inference and agents is so strong. The second-quarter revenue forecast of $11.2 billion also signals continued growth momentum.

What’s particularly interesting is that the ratio of CPUs to GPUs is shifting from the past 1:4 to 1:1. As AI workloads become more complex, the role of CPUs is proving to be much larger than expected. This has significant implications for supply chains in China.

For Chinese companies, there are two sides. Companies like Tongfu Microelectronics, which handle AMD’s packaging and testing, are booming. They process over 80% of AMD chips. In fact, their stock hit the daily limit on May 6. Infrastructure suppliers such as server manufacturers, PCB, and optical module providers are also benefiting.

But on the other hand, the situation is more complicated. Domestic GPU manufacturers are being squeezed by AMD’s cost-performance push. For example, the MI300X with 192GB of memory costs $15,000, while Nvidia charges $32,000 for 80GB. They reportedly sold about $100 million worth of these in China alone, indicating a significant market share loss for domestic alternatives.

However, I want to issue a warning here. How long will this AI supercycle last? Back in 2021, during the semiconductor shortage, everyone was optimistic too. But demand decreased, inventories piled up, and prices plummeted, leading to massive adjustments in supply chain companies.

The problem is that AMD’s growth is almost entirely dependent on its AI business. Its gaming and PC segments remain sluggish. If AI investment spending slows down, the company’s resilience could be severely compromised. I also wonder if the Chinese A-share market is overreacting right now.

Ultimately, while the current AI computing power rally has structurally solid aspects, cyclical risks cannot be ignored. That’s the double-edged sword. Companies with a firm position in the supply chain will benefit in the short term, but parts of the market that are overvalued are likely to undergo correction. Quarterly earnings will become increasingly important moving forward.