Advanced Micro Devices (NASDAQ: AMD) management stated on Tuesday that the company's data center business could grow at a 60% or greater compounded annual growth rate through 2030. This projection was made during a recent investor briefing where company executives outlined their growth strategy.
The company believes this growth trajectory could result in a 348% increase in AMD's stock value over the next five years. If achieved, this would push the stock price to nearly $1,000 per share. AMD's stock already rose 77% in 2025, according to market data.
AMD executives acknowledged the company has traditionally been viewed as an alternative option in both the processor and graphics processing unit markets. In the early 2000s, Intel allowed AMD to exist in the processor realm to avoid monopoly accusations. Similarly, Nvidia's dominance in gaming and artificial intelligence computing positioned AMD as an alternative that limited Nvidia's pricing power.
Company representatives said AMD is now working to change this narrative. They stated that critical improvements have been made to their product lineup to enhance competitiveness in AI computing. A general supply chain crunch could cause users to consider all available options, including AMD's generally cheaper products.
Management believes this situation presents an opportunity for AMD to prove its viability. The company's products could be recognized as viable options rather than second-rate alternatives, according to executives.
AMD's overall business differs from Nvidia's focus on data center products. The company's client and gaming business represents a larger portion of its overall model than Nvidia's equivalent segments. AMD also maintains an embedded processor segment from its Xilinx acquisition.
Company projections indicate these other segments are expected to grow at a 10% CAGR through 2030. This growth rate is significantly slower than the anticipated 60% CAGR for data center revenue. Overall, AMD expects a 35% CAGR for the next five years across all business segments.
AMD currently trades at 33 times forward earnings, indicating significant growth expectations are already priced into the stock. Company executives acknowledged this valuation could limit upside potential but pointed to margin expansion as another potential catalyst.
AMD's gross margin stands at 44%, compared to Nvidia's 70%. Similarly, Nvidia's profit margin is 53% while AMD's is 10%. Management stated they don't expect to match Nvidia's profit margins but believe improvement is possible.
If AMD could increase its gross margin by 10 percentage points and translate this directly to the bottom line, profit margins could potentially double. This margin expansion combined with revenue growth could drive stock gains exceeding the projected 348%, according to company representatives.
The Motley Fool Stock Advisor analyst team recently identified what they believe are the 10 best stocks for investors to buy now. Advanced Micro Devices was not included on this list. The publication noted that when Netflix made their list on December 17, 2004, a $1,000 investment would have grown to $474,578. When Nvidia made their list on April 15, 2005, a $1,000 investment would have grown to $1,141,628.
Stock Advisor's total average return is 955%, compared to 196% for the S&P 500. The publication's disclosure noted that Keithen Drury has positions in Nvidia, and The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia.