AI Needs Chips, Power and Server Racks: AMD, NU E Power and Super Micro Computer in Focus

AMD: Taking On a New Role

Advanced Micro Devices (AMD) is no longer positioning itself merely as a manufacturer of individual processors, but as a holistic provider of AI infrastructure. With the Helios platform, AMD combines its own GPUs, CPUs, networking technology and software into a complete rack system. Recent agreements with OpenAI, Meta, Anthropic and Microsoft underpin this strategic shift. All four technology giants have committed to building significant computing capacity on AMD hardware. CEO Lisa Su hinted that actual orders for 2027 are likely to exceed previous estimates. Demand for the new platform therefore appears to be structurally higher than many market observers had assumed.

While public discussion often centres on the Instinct accelerators, the EPYC server business is emerging as a quiet growth driver. Revenue in this segment rose by over 70% in the second quarter, with both sales volume and average prices increasing significantly. Contrary to some fears, server CPUs are not being displaced by AI workloads, but are an essential component of the growing infrastructure. Agent-based AI systems require powerful host nodes and general computing resources. AMD has raised its market forecast for server CPUs to USD 220 billion by 2030 and expects revenue growth of over 80% in the second half of the year.

Following the sharp rise at the start of the year, the share price has entered a sideways trend – a typical pattern following a strong rally. Investors are now waiting for concrete revenue confirmation to underpin these optimistic expectations. The greatest risks stem from potential supply chain issues at TSMC, particularly in substrates and packaging capacity. Furthermore, competition with Intel remains intense, even though AMD currently has the edge. Should major customers ramp up their capacity as planned, the foundations for further growth would be laid. The order books are well-filled; now production must keep pace.

NU E Power: Development Platform With a Unique Approach

NU E Power has positioned itself as a specialized development platform that takes on energy projects at the earliest stage, guides them through the permitting process to grid connection, and then passes them on to major infrastructure investors. In addition to the sale proceeds, the company retains a minority stake or royalty income in its portfolio. In August, the company signed a non-binding letter of intent to acquire the 145 MWac Hays solar project and its 61.5 MW or 123 MWh battery storage facility in Alberta. Upon completion of the Hays transaction, this would be the company's first wholly owned project. Completion of the acquisition remains subject to seven conditions precedent. Hays has no executed interconnection agreement and no power purchase agreement or offtake arrangement in place. On August 25, John Windsor was appointed COO, bringing operational experience from companies such as Algonquin Power & Utilities and Northland Power. The private placement was increased from CAD 3.0 million to CAD 3.8 million and closed on August 12, with aggregate gross proceeds of CAD 3,860,053, to accelerate project development.

In addition, NU E Power has signed a non-binding letter of intent to purchase a 29.44-acre site in Saskatchewan for CAD 2.7 million. However, the property is currently neither zoned for industrial use nor developed. The plot forms part of a larger Saskatchewan site for which the company already holds development rights. A collaboration with Luxxfolio to assess energy infrastructure for hosting, mining and data centre facilities underlines the focus on customers with high electricity demand. The Luxxfolio collaboration is an agreement to evaluate, and any specific arrangement is subject to further due diligence. NU E Power's total portfolio currently comprises 1,112.25 MW gross and 613.94 MW net. Following the completion of the Hays acquisition, the portfolio would increase to approximately 1,258 MW gross and 760 MW net. The development strategy is based on phased progress and milestone-based capital allocation, with clear stages from feasibility to construction readiness.

Global electrification and the rising demand from AI data centres are driving the need for reliable energy. NU E Power addresses this market by developing projects through to the construction decision stage and handing them over to long-term investors, while the royalty per kilowatt-hour serves as a recurring source of revenue. The recent recruitment of new personnel and the expanded financing are intended to support the implementation of the project pipeline. For investors, the pace of progress on individual projects remains the key focus in the coming months.

Super Micro Computer: Between Record Orders and Cash Burn

The AI server specialist demonstrated its true potential in the fourth quarter of the 2025/26 financial year. The gross profit margin rose to 17.5%, up from around 10% in the previous quarter. Adjusted earnings per share of USD 1.70 were more than double the company's own forecast. However, around 75% of this improvement stems from a one-off combination of customer and product mix. Management itself expects the margin to fall to between 10.4 and 10.8% in the first quarter of 2027. The figures demonstrate that the company can operate profitably, but consistency is still lacking. For investors, the key question remains whether Super Micro can maintain stable, high margins in the long term.

While full-year turnover rose by 78% to USD 39 billion, the company burned through USD 6.8 billion in cash from its operating activities. Inventories soared to USD 12.9 billion, whilst receivables rose to USD 6.1 billion. Both items grew significantly faster than revenue. This may have been a shrewd move, given that memory prices have continued to rise recently. Operating cash flow improved to a positive USD 747 million in the fourth quarter, but this does nothing to alter the negative trend over the past 12 months. The company continues to finance its growth through capital raises and debt, which dilutes shareholder value.

The outlook for 2027 remains positive, however. Management expects revenue of between USD 65 billion and USD 72 billion, representing growth of up to 84%. This forecast is underpinned by new orders worth over USD 60 billion in the fourth quarter, around 70% of which are for AI applications. The recent partnership with Cisco also expands the distribution channel for liquid-cooled systems, which are due to be available from October. The conclusion of the internal investigation into alleged export violations has also provided clarity. Senior management has been partially exonerated, though the trial in November remains a risk factor. The share is currently valued significantly below the industry average.

The AI revolution is not being held back by algorithms, but by the lack of physical infrastructure. AMD is addressing this bottleneck with the Helios platform as a holistic rack system and is benefiting from structurally rising demand, whilst NU E Power aims to capitalize on the growing power demand from data centres with its royalty-based development platform. Super Micro Computer, on the other hand, offers impressive revenue potential but continues to burn through billions and is struggling with falling margins.