Key Takeaways
- Advanced Micro Devices hosted its first analyst day yesterday, where the chipmaker unveiled rosy new targets fueled by booming AI demand.
- AMD said it now believes its total addressable AI market could be over $1 trillion by 2030, up from a previous target of $500 billion by 2028.
Advanced Micro Devices shares are getting a boost from its outlook.
The stock was up about 10% in early trading Wednesday, leading gains on the S&P 500 after the chipmaker yesterday unveiled ambitious new targets at its first analyst day. (Read our daily markets coverage here.) Chip stocks were broadly rising, too, with the SOX index of semiconductor shares up 1.5%.
CEO Lisa Su on Tuesday told analysts the company is seeing “insatiable” AI demand, suggesting that its revenue growth could climb to 35% per year over the next three to five years, with gross margins of 55% to 58%. AMD (AMD) said last week its third-quarter adjusted gross margin was 54%.
AMD said it now believes its total addressable AI market could be over $1 trillion by 2030, up from a previous target of $500 billion by 2028.
Several Wall Street analysts said they remain bullish on the chipmaker’s stock following the event, though they declined to raise their price targets amid persistent worries about an AI bubble and the possibility that AMD’s upward momentum could reverse course if it pops.
Citi analysts, who maintained a neutral rating for the shares, said they believe AMD’s targets “will likely be maintained or exceeded until the AI bubble bursts but our conversations with investors indicate many are already there.”
“We believe the AI bubble will likely burst within a couple years and could result in much lower estimates,” they wrote.
Shares of AMD have roughly doubled in value in 2025 so far, with most of those gains coming in the past few months after a string of big AI deals, including one with ChatGPT maker OpenAI.
