AMD stock soars as CEO Lisa Su dismisses AI spending fears

Advanced Micro DevicesCEO Lisa Su dismissed concerns about Big Tech’s rising spending and said investing in more computing will accelerate the pace of innovation in an interview on CNBC’s “Squawk Box” on Wednesday.

“I don’t think it’s a big gamble,” he said. “I think it’s the right gamble.”

Shares rose 9 percent.

Su added that over the past 12 months, many of AMD’s hyperscaler customers have increased their spending as the technology reaches an “inflection point” and companies are seeing a return on that spending.

Su’s comments come after tech companies announced in their latest earnings reports that they were spending more than $380 billion on artificial intelligence spending, at a time when companies are racing to build infrastructure to support growing demand.

Investors have mostly ignored concerns that giants’ spending will increase while penalizing businesses outside the $1 trillion club that offer similar guidance.

On Tuesday, Su told analysts that AMD expects revenues to grow 35% annually over the next three to five years due to “insatiable” demand for AI chips. He also said the company expects to reach “double-digit” share of the data center AI chip industry in the next three to five years.

Concerns about the impending AI bubble have rattled markets in recent sessions as investors voiced concerns that valuations had become too high.

The AI ​​moves from big investors over the last few trading sessions have not helped sentiment.

Last week, famed short seller Michael Burry revealed his bets against the software maker palantir And Nvidia. This week, “The Big Short” investor accused hyperscalers of understating depreciation expenses by extending the lifecycle of chips. “One of the most common scams of the modern era.”

Softbank said Tuesday it terminated its nearly $6 billion stake in Nvidia in October to back its AI bets, which include a significant commitment to OpenAI.

A person familiar with the matter told CNBC that the sale was not related to AI valuation concerns.

Su told CNBC that he has “great respect” for Masayoshi Son, the Japanese conglomerate’s CEO.

“The AI ​​ecosystem is a place where people place bets and people decide what bets they want to make and what part of the bets they want to bet on,” Su said.