AMD’s Su sees 35% annual sales growth driven by ‘insatiable’ AI demand

AMD The company’s overall revenue growth will rise to about 35% annually over the next three to five years, driven by “insatiable” demand for AI chips, CEO Lisa Su said Tuesday.

Much of that will be accounted for by its AI data center business, which the company expects to grow at about 80 percent annually over the same period and is on track to reach tens of billions of dollars in sales by 2027, Su said.

“That’s what we see as our potential, given the customer traction, both with the announced customers and the customers that are currently working very closely with us,” Su told analysts.

Ultimately, Su said AMD could achieve “double-digit” share of the data center AI chip market in the next three to five years.

AMD shares fell 3% in extended trading.

The AI ​​chip market currently dominates NvidiaThe company has more than 90% of the market share by some estimates, giving the company a market cap of over $4.6 trillion, compared to AMD’s roughly $387 billion valuation.

AMD is holding its first financial analyst day since 2022 as it finds itself at the center of a boom in data center spending on AI.

While companies are spending hundreds of billions of dollars in total on graphics processing unit (GPU) chips to build and power AI applications like OpenAI’s ChatGPT, they are also looking for alternatives to increase capacity and control costs. AMD is the only major GPU developer other than Nvidia.

In October, AMD announced that it would sell billions of dollars worth of AI startups with OpenAI in Instinct AI chips over several years, starting with enough chips to use 1 gigawatt of power in 2026.

As part of the deal, OpenAI could acquire a 10% stake in the chip maker. Su also highlighted long-term agreements Seer And Meta on Tuesday.

AMD shares have nearly doubled so far in 2025.

OpenAI is also helping AMD build its next-generation systems based on its Instinct MI400X AI chips, which will be released next year.

AMD said its chips could be assembled into a “rack-scale” system with 72 chips working together as a single piece, which is needed to run the largest AI models.

If AMD succeeds in the rack space, it will catch up to Nvidia’s AI chips, which have been offered in rack-scale systems for three generations.

Su said the company now sees the total market for AI data center parts and systems to reach $1 trillion per year by 2030, representing 40% annual growth per year. AMD reported AI chip sales of $5 billion in fiscal 2024.

That’s up from the company’s previous forecast of a $500 billion market for AI chips by 2028. But the updated AMD figure also includes central processors (CPUs), an important type of chip at the heart of a computer, but not a pure AI accelerator like the GPUs made by Nvidia and AMD.

AMD’s Epyc CPUs are still the company’s most important product in terms of sales. It primarily competes Intel and some smaller ArmBased processors in the CPU market. AMD also produces chips for gaming consoles, networking components and other devices.

While AMD on Tuesday placed most of its focus on its growing artificial intelligence business, it told shareholders that its legacy businesses were also growing.

“The other message we want to give you today is that all the other parts of our business are firing on all cylinders, and this is actually a beautiful place,” Su said.