I sold out of Advanced Micro Devices (NASDAQ: AMD ) recently and almost immediately regretted it. I was not unusual. A hard fall in the shares started in early March.

It wiped out six months of gains. A recovery was already underway in May. Shares opened May 20 at about $164, down from a high of $213 but well off a low of $144.

Blame the strength of Nvidia (NASDAQ: NVDA ). Artificial intelligence ( AI ) infrastructure spending has been a giant sucking sound for Cloud Czar investment. But the AI game is changing, and AMD has a big role to play.

The Wind Up AMD reported its March quarter on Apr. 30. Revenue of $5.

47 billion was up just 2% from a year ago. Net income under GAAP was just $123 million, 7 cents per share. Even under AMD’s non-GAAP measures net income of $1 billion was just up 4% year-over-year.

It was clear then that AMD has basically lost the server chip race to its rival. Yet that realization seems to have been the catalyst for its latest rise. That’s because once servers can deliver on AI workloads, they need clients to sell into.

Nvidia is historically weak on the client side. But that’s AMD’s meat. On the earnings call, CEO Lisa Su fed this narrative .

There’s a massive PC replacement cycle coming, starting this fall, she said. She called AI “the biggest inflection point in personal computers since the internet.” Our Louis Navillier agrees.

He recently placed a $250 per share price target on AMD stock. I try not to disagree with Uncle Louie. It�.