**AMD Projects Strong Growth Driven by Data Center and AI Market Opportunities**
At its recent Financial Analyst Day in New York, Advanced Micro Devices, Inc. (AMD) outlined ambitious growth targets fueled by expanding opportunities in data centers and artificial intelligence (AI). The chipmaker expects its data center revenue to increase by 60% over the next three to five years, building on a base of $16 billion in 2025.
**Robust Revenue Growth Outlook**
AMD projects overall company revenue to rise 35% over five years, reaching $34 billion in 2025 as the baseline. This growth will be primarily driven by the data center segment, which CEO Lisa Su highlights as a major growth area. Su estimates the total addressable market (TAM) for AI data centers—including GPUs, CPUs, and networking equipment—will reach a staggering $1 trillion within five years.
During the event, CFO Jean Hu shared additional financial targets, forecasting gross margins between 55% and 58%, while operating margins are expected to stay above 35% during the same period. These strong margin expectations signal AMD’s confidence in capturing increasing market share from its competitors.
**Key Customer Deals Accelerate Growth Plans**
AMD recently secured two large-scale agreements that will start in 2026, reinforcing its position in the AI data center market. The company signed a 6-gigawatt deal with OpenAI, and Oracle committed to purchasing 50,000 AMD chips. CEO Lisa Su also mentioned the potential for additional gigawatt-scale projects leveraging AMD’s MI450 series chips and Helios rack-scale solutions, targeting hyperscalers, AI-native companies, and sovereign AI enterprises.
Despite analyst concerns about high power requirements for AI data centers and questions surrounding customers’ purchasing capacity, Su remains optimistic: “This is a very unique moment in AI, and we shouldn’t be shortsighted,” she emphasized.
**Product Pipeline and Market Share Ambitions**
AMD is actively developing its next-generation MI500 series data center processors, although details remain limited. Near-term growth will rely heavily on the current MI450 series, alongside the company’s data center CPU offerings. AMD aims to capture 50% of the server revenue market share, up from its current 40%.
Additionally, AMD expects more than 10% revenue growth over five years in its client segment, which encompasses gaming and PC chips. The company is targeting further market share gains from Intel, which is undergoing a multi-year turnaround effort.
**Strong Stock Performance Outpaces Competitors**
AMD’s strategic positioning and growth prospects have been rewarded by investors. The company’s stock has surged 96% year to date and 61% over the past 12 months. By contrast, Nvidia—a key competitor in the GPU space—has seen gains of 43% year to date and 32% over the last year. AMD’s superior stock performance underscores investor confidence in its ability to lead in the evolving AI and data center markets.
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