Advanced Micro Devices (AMD) is optimistic about its data center business, projecting over 60% annualized revenue growth in the next three to five years, driven by demand for its AI accelerator chips from major players like OpenAI and Meta Platforms. This expansion represents a multibillion-dollar opportunity for AMD, which has already secured significant contracts for deploying its chips in large volumes.

In addition to its data center prospects, AMD’s semi-custom business is poised for a resurgence, thanks to upcoming next-generation gaming consoles from Microsoft and Sony. Historically, AMD has relied on strong sales of semi-custom chips for consoles, which have previously helped stabilize and grow its revenue. With the anticipated launches in 2027, AMD is set to benefit from a major upgrade cycle, as current models will be nearly seven years old by then, further boosting its gaming revenue.

For investors, the combination of robust growth in the data center segment and the revival of the semi-custom business positions AMD for potential significant long-term gains. If AMD achieves its projected earnings per share of over $20 in five years, the stock could more than double from its current levels, highlighting the strong market potential ahead.

Source: fool.com