AMD aims to expand data center, AI leadership with 35% revenue CAGR

NEW YORK - AMD (NASDAQ:AMD) outlined its long-term growth strategy at its Financial Analyst Day on Tuesday, targeting more than 35% revenue compound annual growth rate and non-GAAP earnings per share exceeding $20 over the next three to five years. The chipmaker, currently valued at $387.5 billion, has already demonstrated strong growth with revenue increasing 31.8% in the last twelve months. According to InvestingPro data, AMD appears overvalued at its current trading price of $237.52, despite analysts setting price targets as high as $350.

The chipmaker expects its data center business to grow at more than 60% CAGR, driven by its AMD Instinct MI350 Series GPUs, which the company described as its fastest ramping product in company history. AMD plans to launch Helios systems with Instinct MI450 Series GPUs in the third quarter of 2026, followed by the MI500 Series in 2027.

"AMD is entering a new era of growth fueled by our leadership technology roadmaps and accelerating AI momentum," said Dr. Lisa Su, AMD chair and CEO, according to the press release.

The company aims to achieve more than 50% server CPU revenue market share with its EPYC processor portfolio and drive data center AI revenue at more than 80% CAGR.

For its client and gaming segment, AMD expects to exceed 40% client revenue market share while building on what it says is a base of more than one billion AMD-based gaming devices. The company projects more than 10% revenue CAGR across its embedded and client and gaming businesses.

AMD also detailed its 5th Gen null Fabric technology and shared extended roadmaps across x86 CPUs, data center and gaming GPUs, and NPUs.

The company stated that its ROCm open software downloads have increased tenfold year-over-year, and its AI PC portfolio has expanded 2.5 times since 2024, with AMD Ryzen now powering more than 250 platforms across notebooks and desktops.

In other recent news, OpenAI CEO Sam Altman announced that the company does not seek government guarantees for its data centers. OpenAI is expanding its data center operations and anticipates ending 2025 with an annualized revenue run rate exceeding $20 billion. In related developments, Advanced Micro Devices (AMD) has seen several analysts adjust their stock price targets. TD Cowen increased its price target for AMD to $290, citing progress in the company's data center GPU sector. Benchmark also raised its price target to $325, highlighting AMD's growing influence in the AI data center market. Truist Securities set a new price target of $279, noting minor imperfections in AMD's third-quarter results but maintaining a positive outlook. Additionally, Cantor Fitzgerald reiterated its Overweight rating and a $350 price target, following AMD's recent quarterly results. AMD reported a modest beat for the September quarter, with mixed guidance for the December quarter, indicating slightly better revenue but lower earnings per share expectations.

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