In 2018, at the Chinese Grand Prix, Martin Brundle from Sky Sports F1 was doing his usual grid walk before the race.

He walked up to a lady with a lot of lanyards around her neck and said, “Excuse me, do you speak English?”

She did.

That’s because she was Lisa Su.

Born in Taiwan, she moved to the US at the age of three and grew up in Queens. At the time, she was running a company worth about $10 billion, with the stock trading around $10.

That company was Advanced Micro Devices (NASDAQ: AMD).

Fast forward eight years, and AMD, still led by Su, has crossed a market capitalisation of $650 billion. The stock just jumped 16% in after-hours trading after a blowout earnings report.

Revenue came in at $10.3 billion, up 38% year-on-year. Data centre revenue hit $5.8 billion, up 57%. Free cash flow tripled to $2.6 billion. And next-quarter guidance landed at $11.2 billion, well ahead of the $10.5 billion Wall Street was expecting.

For as long as I can remember, AMD has played second fiddle to NVIDIA (NASDAQ: NVDA).

Always close, never quite there. But the data centre business, once a sliver of the AMD story, is now the primary driver of revenue and earnings growth.

Su might not have been instantly recognisable in 2018, and I’m sure Brundle still kicks himself over that one.

But I’d say she’s the real headline now, and what AMD just showed us is that the AI rollout is far from done.

In fact, it’s just starting.

3,963% in a year

Back in early January, I said 2026 would be the year of shortage before excess.

That memory, storage, compute, and power were all heading toward a wall, and that the companies supplying them would benefit in a big way.

Four months in, it’s moving faster than even I expected.

Micron Technology (NASDAQ: MU) is up roughly 124% year to date, with a market cap pushing toward $800 billion.

Q2 revenue came in at $23.86 billion, beating estimates by more than 21%. Non-GAAP gross margins hit 74.9%. Free cash flow jumped 705% year on year.

And their entire 2026 HBM production is already sold out under binding contracts. Micron’s quarterly revenue is now higher than its annual revenue was just three years ago.

Then there’s SanDisk (NASDAQ: SNDK).

Spun out of Western Digital in February last year at a market cap of around $7 billion, it now sits north of $200 billion, larger than the parent that created it. The stock is up more than 492% year to date.

And it’s up an astonishing 3,963% over the past year.

Q3 revenue came in at $5.95 billion, up 251%, with data centre revenue alone jumping 645%. Gross margins expanded from 22.5% a year ago to 78.4% last quarter. They’ve locked in $42 billion in long-term supply contracts, wiped out long-term debt, and authorised a $6 billion buyback.

It looks like a bubble if you just stare at the charts.

But there’s a reason I believe we’re not even close to bubble territory yet.

The valuations still aren’t priced properly

Despite shares having gone parabolic across the sector, forward price-to-earnings ratios remain surprisingly modest.

Micron Technology (NASDAQ: MU) trades on a forward P/E of around six times earnings. Yes, six.

SanDisk (NASDAQ: SNDK) sits at around 12 times.

Advanced Micro Devices (NASDAQ: AMD) is higher at roughly 50 times forward earnings, but that will come down if they continue to grow at 50% quarter on quarter.

The market, I think, is still pricing semiconductor companies as if they are cyclical. No. There is no cycle here. This is up only.

Normally, I would say that is enough and step out of the market. But the fundamentals are not saying that. Micron is not seeing its stock price move five times higher on the back of single-digit revenue growth.

These are high-growth companies trading like telco industrials. It is a huge market mispricing, and it is still there.

The bears will say that memory always reverts to the mean, that capacity catches up, and that margins collapse.

We have seen that before. But that view ignores the fact that this is a self-feeding shortage. And to meet the scale of demand, capacity is not coming online in the next six months.

Capacity expansion in semiconductor fabs takes years, not months, and SK Hynix, Samsung Electronics, and Micron are all running flat out with order books extending well into 2027.

Meanwhile, AMD is shipping Helios racks with 31TB of HBM4 per system. NVIDIA is buying memory wherever it can find it. OpenAI has signed AMD up for 6 gigawatts of GPU deployment, mapping to $15 to $25 billion of equivalent spend. Hyperscaler capital expenditure commitments for 2026 sit around $625 billion, and Meta Platforms is committing over $145 billion.

I don’t see a scenario where any of this slows down inside the next 18 months.

If you are bearish on AI right now, I genuinely think you are on the wrong side of the fence.

The numbers are screaming this market is still going up. The companies are sold out of stock, cannot make it fast enough, and are raising prices in a market willing to pay even more just to maintain competitive advantages.

Valuations still look cheap on a forward basis, and we are, generously, in maybe the second or third year of a buildout that will define the next decade.

Generational wealth is being created in this corner of the market while most retail investors are still deciding whether AI is real and whether the bears are right.

They are not. They are wrong.

We are accelerating.

The companies and leaders like Lisa Su, supplying the picks and shovels for the great AI buildout, remain the smartest way to ride this boom.

Until next time,

Sam Volkering
Investment Director, Southbank Investment Research