Core Viewpoint - Advanced Micro Devices (AMD) has issued ambitious growth projections, aiming for significant revenue increases and a potential market cap of $1 trillion by 2028, despite currently lagging behind Nvidia in the AI sector [1][2]. Company Overview - AMD's current market cap is approximately $360 billion, requiring its stock to nearly triple to reach the $1 trillion mark by 2028 [2]. - The company has a more diversified product lineup compared to Nvidia, which includes central processing units, embedded processors, and various data center equipment, potentially providing stability against market fluctuations [2]. Financial Performance - In the third quarter of fiscal 2026, Nvidia generated $51.2 billion from data center equipment, while AMD's data center revenue was $4.3 billion out of a total of $9.3 billion [3]. - AMD's revenue for the past 12 months was $32 billion, with projections indicating it could reach approximately $84.9 billion by 2028 at a 35% compound annual growth rate (CAGR) [7]. Growth Projections - AMD anticipates a greater than 60% CAGR in data center revenue over the next five years, significantly outpacing its recent growth [5]. - The company expects an overall revenue CAGR of 35% and adjusted earnings per share exceeding $20 [7]. Profitability Expectations - AMD projects an adjusted operating margin greater than 35%, a substantial increase from the current 10%, which could lead to an estimated profit margin of 25% by 2028 [8]. - At $84.9 billion in revenue, this would translate to approximately $21.2 billion in profits [8]. Valuation Insights - Currently, AMD's stock trades at over 110 times earnings, which is considered unrealistic; a more reasonable valuation would be around 40 times earnings, potentially valuing the company at $848 billion [9]. - If growth rates are slightly higher in the early years or if a higher valuation is applied, AMD could reach a $1 trillion valuation by 2028, with a more conservative estimate suggesting it may achieve this by 2030 [9][10].