AMD Says Data Center Revenue Could Jump 60% Annually from Here. Should You Buy AMD Stock Now?

Core Viewpoint - Advanced Micro Devices (AMD) is poised for significant growth, with data center revenue expected to increase by 60% annually over the next three to five years, and overall revenue projected to grow by 35% yearly through the end of the decade [1][2]. Group 1: Revenue Growth Projections - AMD's data center revenue is anticipated to grow by 60% annually over the next three to five years [1]. - The company forecasts overall revenue growth of 35% per year through 2030, potentially quadrupling its top line in five years [2]. - This growth could lead to a market capitalization of approximately $1.7 trillion by 2030, assuming a price-sales (P/S) multiple of about 15x [2]. Group 2: Stock Performance and Valuation - AMD shares have increased roughly 230% from their year-to-date low in early April [1]. - A potential per-share price of over $1,000 is indicated, suggesting a possible 300% return within five years, based on revenue growth assumptions [3]. - AMD's current P/S multiple is not excessively high compared to peers, such as Nvidia, which trades at a P/S multiple of 37x [4]. Group 3: Analyst Insights - Wells Fargo's senior analyst has reiterated an "Overweight" rating on AMD, projecting a price target of $345 for the next year [5]. - The analyst cites AMD's strong financial model and its ability to gain market share across core verticals, including AI accelerators and general-purpose GPUs [5]. - The expectation of accelerating operating leverage and earnings power exceeding $10 per share by 2027 supports a bullish outlook on AMD stock [6].