AMD Just Declared War on Nvidia--And It's Gunning for $100 Billion

This article first appeared on GuruFocus.

Advanced Micro Devices (NASDAQ:AMD) sent a powerful signal to investors this week, laying out an ambitious plan to triple earnings and reach $100 billion in annual data center chip revenue within five years. The Santa Clara-based chipmaker's stock jumped 4% in post-market trading after the announcement, extending a 16% rally since October, when AMD signed a multiyear deal with OpenAI projected to generate tens of billions in annual revenue. CEO Lisa Su told investors at the company's analyst day in New York that AMD expects the market for its data center chips to grow to $1 trillion by 2030, with AI serving as the dominant growth engine.

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CFO Jean Hu projected that AMD's total business could grow by roughly 35% annually, with its data center segment expanding at a faster 60% pace. The company also expects earnings to climb to $20 per share within the next three to five years, compared with LSEG's 2025 estimate of $2.68 per share. Su described the data center segment as AMD's most powerful growth lever, positioned at the center of a broader AI infrastructure expansion that rival Nvidia (NASDAQ:NVDA) has also pegged at up to $4 trillion by 2030. The forecast suggests that the two companies may be entering a prolonged cycle of AI-driven demand, each carving out distinct lanes in a trillion-dollar technology race.

AMD also lifted the curtain on its next-generation MI400 series of AI chips, slated for release in 2026. The chips will include variants optimized for scientific and generative AI workloads, complemented by a new server rack system designed to rival Nvidia's GB200 NVL72. Su emphasized that AMD's strategy hinges not only on hardware but also on building a strong AI software backbone. The company recently acquired server builder ZT Systems and AI startup MK1, part of a string of smaller acquisitions that Chief Strategy Officer Mat Hein called AI software tuck-ins. The goal, he said, is to ensure AMD has the right mix of software talent and integration depth to compete at scale in the fast-evolving AI economy.

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