Why AMD Stock Jumped Today
Key Points
Advanced Micro Devices has a plan to capture a bigger piece of the booming artificial intelligence (AI) industry.
Management sees impressive revenue gains and profit margin expansion over the next half-decade.
- 10 stocks we like better than Advanced Micro Devices ›
Shares of Advanced Micro Devices (NASDAQ: AMD) climbed 9% on Wednesday after the artificial intelligence (AI) chipmaker laid out a promising growth trajectory for investors at its Financial Analyst Day event.
Image source: Getty Images.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
AMD has a long runway for expansion still ahead
The semiconductor designer forecasts revenue gains of more than 35% annually over the next three-to-five years, fueled by 60% annual growth in its data center business.
The company's forthcoming Helios systems, featuring ultra-high memory Instinct MI450 Series graphics processing units (GPUs), are designed to provide rack-scale performance to hyperscalers and other customers, starting in the third quarter of 2026.
AMD also plans to capture more than half of the server central processing unit (CPU) market, up from roughly 40% today, driven by strong sales of its highly efficient EPYC processors.
Better still, AMD expects its adjusted operating margin to rise to over 35%, up from about 24% today, as it scales its operations. In turn, management sees a path to more than $20 in earnings per share.
"AMD is entering a new era of growth fueled by our leadership technology roadmaps and accelerating AI momentum," CEO Lisa Su said.
Competition will be fierce
Rival Nvidia (NASDAQ: NVDA), of course, won't cede ground willingly. The $4.7 trillion semiconductor behemoth dominates the market for advanced AI chips.
However, Nvidia's customers want to diversify their chip suppliers, ease capacity shortages, and keep a lid on prices, so they're likely to support AMD's efforts. AMD thus has a realistic chance at capturing a significant piece of the booming AI chip market in the coming years.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $612,872!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,184,044!*
Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of November 10, 2025
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
