Advanced Micro Devices (NASDAQ:AMD) set an ambitious tone at its latest Analyst Day last week, laying out plans to drive a new phase of expansion centered on AI and a push toward the $1 trillion compute market. The company pointed to strong expected growth across data-center, client, and embedded segments, fueled by next-gen architectures and a rapidly advancing AI roadmap. CEO Lisa Su framed the event as the beginning of a multi-year uptrend, backed by a strengthened product pipeline and a strategy to capture a larger share of high-performance computing demand.
TipRanks Black Friday Sale
Wall Street’s early reaction was largely upbeat, with many analysts arguing AMD is now far better positioned to challenge Nvidia’s dominance of the AI chip space. Still, a few voices remain cautious.
Seaport analyst Jay Goldberg, for instance, came out of the event with “mixed views.”
On the plus side, the company laid out a five-year plan that could push consensus expectations higher. AMD called for $100 billion in annual revenue by 2030, with gross margins of 55%-58% and operating margins above 35% – significantly higher than what they’re achieving today. The product lineup also caught Goldberg’s attention, with the MI500’s early specs appearing strongly competitive with Nvidia’s Vera Rubin. “This is an impressive ramp for any normal semiconductor company, once again demonstrating AMD’s ability to execute,” Goldberg went on to say.
However, Goldberg adds that this should all be seen “in the context of some very non-normal times.” To begin with, the $100 billion revenue target for 2030 represents just a 10% share of the $1 trillion TAM AMD is projecting for silicon that year. “More than they have now, but not quite inspirational,” is Goldberg’s view. Picking another bone, the company also emphasized the role of CPUs in AI data centers, where it expects to capture a meaningful slice. Stripping that out, the forecast implies that AMD’s GPU and AI accelerator market share would sit only in the mid-single digits. “To their credit,” Goldberg commented, “we believe AMD does not like to exaggerate, but these figures are not exciting to us.”
Another “nagging concern” is customer concentration. In the near term, the company’s outlook leans heavily on OpenAI, and Goldberg thinks it’s uncertain where OpenAI will secure the funds to follow through on its purchase plans, or how it will decide to allocate demand across the multiple chip lines it’s committing to at the same time.
So, while Goldberg still sees AMD as “one of the best run semiconductor companies,” the analyst remains “cautious on how steadily” it can execute its roadmap.
Bottom line, Goldberg assigns AMD shares a Neutral rating, without having a fixed price target in mind. (To watch Goldberg’s track record, click here)
Others on the Street do have targets and the average lands at $281.78, a figure that factors in 12-month gains of 26%. Based on a mix of 27 Buys vs. 10 Holds, the analyst consensus rates AMD a Moderate Buy. (See AMD stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Disclaimer & DisclosureReport an Issue
