NEW YORK — Advanced Micro Devices Inc. (AMD) forecast Tuesday that its profit will more than triple by 2030, as the company expects explosive growth in the global data center chip market, projected to reach $1 trillion within the decade.
At its first analyst day in three years, held in New York, AMD said it aims to generate $100 billion annually from its data center chip division within five years, fueled largely by demand for artificial intelligence (AI) and high performance computing.
The announcement sent AMD shares up 4% in after hours trading, recovering some losses from earlier in the day. The Santa Clara, California based chipmaker has been pushing aggressively into AI and data center markets to compete with industry leader Nvidia.
AMD’s shares have climbed 16% since October 6, following a multiyear partnership with OpenAI expected to generate tens of billions of dollars in annual revenue.
While the agreement is not expected to dethrone Nvidia’s dominance in AI chips, analysts view it as a strategic endorsement of AMD’s capabilities.
“This deal validates AMD’s AI roadmap,” said semiconductor analyst Carla Mendes of Silicon Research Partners. “It shows that major AI players want competition in the hardware stack.”
AMD CEO Lisa Su told analysts the company expects the data center market including processors, networking components, and AI accelerators to expand dramatically through the decade.
Artificial intelligence is driving a new era of computing, Su said. “There’s no question that data center is the largest growth opportunity out there, and one that AMD is very well positioned for.”
Industry observers say AMD’s bullish forecast reflects the intensifying race to supply chips powering the AI revolution. Nvidia currently holds the lion’s share of AI chip sales, but AMD has gained ground by offering competitive alternatives and forming alliances with major cloud providers.
“AMD is emerging as the second strong pillar in the AI ecosystem,” said Daniel Ho, a chip industry analyst at TechEdge Consulting.
“Its diversified portfolio from CPUs to GPUs and networking solutions gives it flexibility to serve different segments of the data center market.”
Finance chief Jean Hu projected AMD’s earnings would grow to $20 per share within the next three to five years, compared with LSEG estimates of $2.68 per share for 2025.
The company also expects its overall business to grow 35% annually, with its data center segment increasing by 60% each year.
“This kind of growth trajectory is rare in the semiconductor industry,” said Ho. “It depends on execution, but if AI infrastructure spending continues at this pace, AMD’s projections are not unrealistic.”
The AI infrastructure market is expanding rapidly as tech giants build massive data centers to support generative AI models. Nvidia CEO Jensen Huang has estimated the broader AI infrastructure market could grow to between $3 trillion and $4 trillion by 2030.
For AMD, reaching $100 billion in annual data center chip revenue would represent a tenfold increase from current levels. In 2023, the company reported total revenue of $22.7 billion, with roughly a third coming from data center products.
AMD’s upcoming MI400 series of AI chips, slated for release in 2026, will feature multiple variants designed for scientific computing and generative AI.
The company also plans to introduce a full server rack solution similar to Nvidia’s GB200 NVL72 targeting enterprise customers seeking turnkey AI systems.
“AMD is clearly moving up the stack,” said John Reese, a hardware engineer at a New York based cloud provider. “It’s no longer just about chips. It’s about delivering complete AI systems that can compete head to head with Nvidia’s offerings.”
Investors and industry watchers are cautiously optimistic. “AMD has proven it can execute on complex transitions, like moving from PC chips to high performance computing,” said portfolio manager Anita George of Bayline Capital.
“But breaking Nvidia’s grip on the AI market won’t happen overnight.” At the company’s analyst day, attendees expressed enthusiasm for AMD’s direction.
“The energy in the room was palpable,” said Mark Phillips, an independent semiconductor consultant who attended the event. “Lisa Su’s message was clear AMD wants to be at the center of the AI boom.”
AMD’s growth plan is underpinned by its continued investment in AI focused acquisitions. Over the past year, the company has bought several startups specializing in AI software and server systems, including the recent acquisition of MK1 and server manufacturer ZT Systems.
Chief Strategy Officer Mat Hein said in an interview that the acquisitions are part of AMD’s effort to build a “complete AI ecosystem.”
We’ve built an M&A machine, Su added, emphasizing the company’s goal to integrate hardware and software capabilities under one roof.
Analysts expect AMD to continue pursuing smaller mergers and acquisitions to bolster its AI portfolio, while maintaining its core chip design focus.
AMD’s ambitious projections mark a pivotal moment in its evolution from a traditional CPU manufacturer to a full stack AI computing company.
With the global data center chip market projected to hit $1 trillion by 2030, AMD’s challenge will be maintaining momentum in a fiercely competitive landscape dominated by Nvidia and Intel.
Whether the company achieves its forecasted $100 billion in annual data center revenue remains uncertain, but its renewed focus on AI, strategic partnerships, and steady innovation signal that AMD intends to be a long term contender in the trillion dollar data center race.