AMD stock received a nice lift from the company’s upbeat commentary regarding its technology roadmaps and accelerating AI momentum.
- AMD stated that it expects revenues to grow at a 35% compounded annual growth rate (CAGR) over the next three to five years.
- It expects the upcoming “Helios” systems, powered by the MI450 Series, to launch in the third quarter of 2026, followed by the MI500 Series.
- The next-gen Gorgon and Medusa processors will help AI PCs to reach an AI performance inflection point, the company said.
Advanced Micro Devices, Inc. (AMD) shares climbed nearly 5% as investors took stock of the details that emerged from the artificial intelligence (AI) chipmaker’s Financial Analyst Day that was held on Tuesday.
Despite Nvidia’s pole position in the AI chip market, AMD has made meaningful inroads. AMD stock’s year-to-date gain (YTD) of 96% outstrips Nvidia’s nearly 44% rise.
AMD’s Bright AI Future
CEO Lisa Su sounded upbeat about AMD’s AI opportunity. In a statement released after the event, Su said, “AMD is entering a new era of growth fueled by our leadership technology roadmaps and accelerating AI momentum.”
“With the broadest portfolio of products and our deepening strategic partnerships, AMD is uniquely positioned to lead the next generation of high-performance and AI computing.”
Delving into the company’s long-term financial model, based on its strategic priorities, AMD stated that it expects revenues to grow at a 35% compounded annual growth rate (CAGR) over the next three to five years. It models adjusted operating margin greater than 35% and adjusted earnings per share (EPS) exceeding $20.
For the Data Center business, the company forecasts a revenue CAGR of more than 60%. This marked an acceleration from the 22% YoY growth rate AMD reported for the business in the third quarter. The Data Center business includes sales from the company’s EPYC server processor chips and its AI GPUs. AMD aims to achieve a revenue share of more than 50% in the server CPU market.
AMD expects its Embedded, Client & Gaming businesses to grow at a more modest 10% pace each.
AMD’s Product Momentum
AMD stated that its MI350 series has been the fastest-ramping product in its history and has been deployed at scale by cloud providers, including Oracle Cloud Infrastructure. It expects the upcoming “Helios” systems, powered by the MI450 Series, to launch in the third quarter of 2026, followed by the MI500 Series. The Helios systems will likely deliver “rack-scale performance leadership with industry-leading memory capacity and scale-out bandwidth,” the company said.
The company touted that its next-generation Venice CPUs will deliver performance, density, and energy efficiency to power AI and general-purpose computing. The company also pointed to its networking solutions, including Pensando Pollara and next-gen Vulcano AI NIC.
The next-gen Gorgon and Medusa processors will help AI PCs to reach an AI performance inflection point, the company said.
What Retail Feels About AMD Stock
On Stocktwits, retail sentiment toward AMD stock was ‘bullish’ as of late Tuesday, though the mood improved a few notches. The message volume, however, tapered to ‘normal.’
A bullish user stated that they expect upgrades to roll out on Wednesday. “Everyone is gonna fomo and chase it higher; short-squeezing,” they said. Short interest in AMD stock is 2.40%, according to Koyfin. This is markedly lower than the 3.70% peak seen in January this year.
Another user said it’s not too late to turn bullish on AMD. They expect AMD to be a $600+ stock in a few years and called it a “very, very good investment.”
According to Koyfin, the average price target for the stock is $273.04, implying nearly 15% upside from Tuesday’s closing price. AMD has traded in a 52-week range of $76.48 to $267.08, with the upper bound being its all-time high, set on Oct. 29.
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