AMD’s Su sees 35% annual gross sales development pushed by ‘insatiable’ AI demand

AMD CEO Lisa Su stated on Tuesday that the corporate’s general income development would broaden to about 35% per 12 months over the subsequent three to 5 years, pushed by “insatiable” demand for synthetic intelligence chips.

Su stated that a lot of that might be captured by the corporate’s AI information heart enterprise, which it expects to develop at about 80% per 12 months over the identical time interval, on monitor to hit tens of billions of {dollars} of gross sales by 2027.

“That is what we see as our potential given the client traction, each with the introduced prospects, in addition to prospects which are presently working very carefully with us,” Su instructed analysts.

In the end, Su stated that AMD may have the ability to obtain “double-digit” share within the information heart AI chip market over the subsequent three to 5 years.

AMD shares fell 3% in prolonged buying and selling.

The AI chip market is presently dominated by Nvidia, which has over 90% of the market share, in line with some estimates, and which has given the corporate a market cap of over $4.6 trillion, versus AMD’s roughly $387 billion valuation.

AMD is holding its first monetary analyst day since 2022, as the corporate has discovered itself on the heart of a increase in information heart spending for AI.

Whereas corporations are spending tons of of billions of {dollars} in whole on graphics processing unit (GPU) chips to construct and energy synthetic intelligence purposes like OpenAI’s ChatGPT, they’re additionally on the lookout for alternate options to extend capability and management prices. AMD is the one different main developer of GPUs other than Nvidia.

In October, AMD introduced a partnership with OpenAI through which it will promote the AI startup billions of {dollars} in its Intuition AI chips over a number of years, beginning with sufficient chips in 2026 to make use of 1 gigawatt of energy.

As a part of the deal, OpenAI may find yourself taking a ten% stake within the chipmaker. Su additionally highlighted long-term offers with Oracle and Meta on Tuesday.

AMD shares have almost doubled up to now in 2025.

OpenAI can be serving to AMD arrange its next-generation methods based mostly round its Intuition MI400X AI chips, which ship subsequent 12 months.

AMD has stated that its chips will have the ability to be assembled right into a “rack-scale” system the place 72 of its chips work collectively as one, which is important for working the most important AI fashions.

If AMD succeeds at its rack, it is going to meet up with Nvidia’s AI chips, which have been supplied in rack-scale methods for 3 product generations.

Su stated that the corporate now sees the whole marketplace for AI information heart components and methods hitting $1 trillion per 12 months in 2030, representing 40% annual development per 12 months. AMD reported $5 billion in AI chip gross sales in its fiscal 2024.

That is up from the corporate’s earlier forecast of a $500 billion market in 2028 for AI chips. However the up to date AMD determine additionally contains central processors (CPU), an necessary sort of chip that sits on the coronary heart of a pc, however is not a pure AI accelerator just like the GPUs made by Nvidia and AMD.

AMD’s Epyc CPUs are nonetheless the corporate’s most necessary product by gross sales. It primarily competes with Intel and a few smaller Arm-based processors within the CPU market. AMD additionally makes chips for recreation consoles, networking components, and different units.

On Tuesday, though AMD targeted a lot of its give attention to its rising AI enterprise, it instructed shareholders that its older companies had been rising too.

“The opposite message that we wish to depart you with at this time is each different a part of our enterprise is firing on all cylinders, and that is really a really good place to be,” Su stated.