"AMD’s Q2 CY2025 earnings came in below expectations, but this was mostly expected. For the past six months, we have been highlighting that demand for the MI325X was soft, the launch was delayed and ended up landing a couple of months after Nvidia’s B200, even though MI325X was initially positioned as an H200 competitor.  The MI355X was not broadly available during the quarter either, so it did not move the revenue needle much. Looking ahead, MI355X should be reasonably competitive with B200 on inference performance per TCO, but it will not match GB200, the MI355X scales to a world size of just 8, while GB200 goes up to 72.   We expect AMD to close much of the system-level hardware gap by late 2026 or early 2027 with MI400 UALoE72.  On the software side, there are massive improvements across training and inferencing since our December 2024 article, though there is still a long road ahead. AMD needs to close gaps around production-ready multi-node disaggregated prefill inferencing, WideEP multi-node inference, ROCm support for DeepEP MoE dispatch, and cleaning up the 100+ unit tests in PyTorch currently tagged with @skipIfRocm or @cudaOnly. AMD’s AI lead, @AnushElangovan, is actively working on this every day. Instead of previous stock buybacks, we expect AMD to continue increasing Opex as it reinvests in AI, growing software headcount, boosting talent compensation, and renting back MI325X/MI355X clusters from GPU cloud partners like OCI, Azure, TensorWave, DigitalOcean, Vultr, and Crusoe for internal R&D."