Invezz·2026-01-19 15:53Core Viewpoint - Advanced Micro Devices (AMD) projects significant growth in its data center revenue, potentially leading to a stock price increase of 348% by 2030, but there are concerns about whether this growth is already priced into the stock [1][3][6]. Group 1: Growth Projections - AMD expects its data center revenue to grow at a compounded annual growth rate (CAGR) exceeding 60% through 2030, with AI accelerators projected to grow at over 80% annually [2]. - The AI infrastructure market is anticipated to exceed $1 trillion by 2030, positioning AMD as a serious competitor to Nvidia [3]. - AMD's overall revenue is expected to grow at a CAGR of over 35% in the next three to five years [3]. Group 2: Stock Valuation and Market Sentiment - AMD's stock trades at a forward price-to-earnings multiple of approximately 33 times, indicating that significant growth is already factored into the current valuation [6]. - Analysts have set a 12-month price target for AMD stock at approximately $281–$284, reflecting a 22–23% upside from current levels, which is significantly lower than the projected 348% [11]. Group 3: Competitive Landscape - AMD has signed a deal with OpenAI to supply up to 6 gigawatts of GPU capacity by 2030, providing demand certainty [4]. - Oracle Cloud Infrastructure plans to deploy 50,000 of AMD's MI450 chips, indicating customer confidence in AMD's technology [5]. - AMD's gross margin is reported at 44%, while Nvidia's is at 70%, highlighting a significant margin gap that AMD needs to address to achieve its growth targets [7][9]. Group 4: Execution Risks - AMD faces execution risks, particularly with Nvidia's upcoming Rubin GPU line, which is expected to outperform AMD's MI450 [10]. - For AMD to achieve the 348% growth scenario, it must not only grow rapidly but also close the margin gap with Nvidia, which analysts believe is a challenging task [8][12].