Advanced Micro Devices (AMD) is trying to distance itself from the specter of a bubble. The company’s stock price soared more than 11% at one point on Wednesday, hitting above $263, just shy of the all-time high of $267 hit just days earlier. Its market capitalization exceeds $410 billion. The semiconductor giant’s foray into the stock market comes after it predicted strong growth in the coming years, driven by growth in infrastructure dedicated to artificial intelligence (AI).
Therefore, AMD’s average annual revenue growth rate will exceed 35% over the next three to five years, CEO Lisa Su announced yesterday at Analyst Day in New York.
Similarly, revenue from AMD’s AI data center business will grow an average of 80% annually over the same period. The group also expects adjusted earnings to exceed $20 per share and operating margin for the period to exceed 35%.
The company has maintained strong growth this term as well. AMD posted revenue of $9.246 billion in the third quarter, up 36% year over year, and net income rose 61% to $1.243 billion. Lisa Su highlighted the quarter’s record revenue and profitability, reflecting widespread demand for high-performance EPYC and Ryzen processors and Instinct AI accelerators.
Amid growing concerns over billions of dollars in spending planned for new computer systems for AI, NVIDIA rival AMD updated investors on its long-term outlook. In this sense, major companies such as Meta, Alphabet, and Microsoft have announced significant investment increases this year and are predicting even greater investment increases next year. This year alone, major technology companies will spend more than $400 billion in capital expenditures.
In this sense, AMD stock has doubled this year due to agreements signed with groups such as OpenAI and Oracle. within their agreement, start Sam Altman’s stake could amount to up to 10% of the semiconductor company’s capital. In addition to these agreements, AMD has signed agreements in recent months with IBM, Cisco Systems, Amazon Web Services, and the U.S. Department of Energy.
Lisa Su said that AMD and OpenAI’s contract is structured in a very disciplined manner. However, start is the company that best predicts future AI computing needs and will be well-funded if its AI user and revenue growth projections are met. “I’m not going to bet on him,” the executive said.
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