2 Reasons AMD Can Still Outperform by 2030

Volatility picked up following the midterm elections that created uncertainty around the data center build-out. As a leading chip supplier, Advanced Micro Devices (NASDAQ:AMD) is down about 20% over the last month, as of Nov. 9, but based on revelations in its latest third-quarter results, I believe the stock can still beat the market through 2030.

According to Multpl, S&P 500 (SNPINDEX:^GSPC) earnings per share (EPS) growth has averaged about 22.3% annually over the past several decades. FactSet projects S&P 500 earnings growth of about 16% in 2027.

AMD is aiming higher. In November 2025, it targeted revenue growth above 35% annually and adjusted EPS above $20 within three to five years. In August, CEO Lisa Su said the company expects to "significantly exceed" that EPS goal. Two growth engines support it -- server chips lifted by AI agents, and Instinct graphics processing units (GPUs) with a multiyear sales runway.

1. Server CPUs: AI agents are driving demand for AMD's EPYC chips

AMD's EPYC chips, the central processing units (CPUs) in servers, can benefit as AI agents spread. Agents run continuously to coordinate with other agents, complete tasks, and can spawn more agents. AMD is seeing the demand, with data center segment sales up 97% year over year in the third quarter, driven by EPYC and the launch of AMD Instinct MI450 GPUs.

"Adoption is just starting," Su said. A 2025 Gartner report forecasts that agentic AI will be included in 33% of enterprise software applications by 2028, up from less than 1% in 2024.

AMD forecasts the server CPU market to expand from about $26 billion in 2025 to $220 billion in 2030. Its server market share has been steadily climbing since 2017, reaching about 40% in 2025, according to Mercury Research, and it continues to gain share in 2026.

2. Instinct GPUs: A $1.4 trillion market by 2030

AMD's Instinct GPUs are accelerators for training and running AI models. AMD sees its market for these chips growing from about $200 billion in 2025 to $1.4 trillion in 2030. That can fuel its growth, as data center chips contributed about 64% of AMD's total revenue in Q3.

Image source: Getty Images.

AMD said its visibility into 2027 continues to strengthen. During its Nov. 3 earnings call, it raised its outlook for server revenue growth to double next year. Its MI455X GPUs started shipping last quarter, and interest in AMD's next-generation MI500 GPUs is "very high," according to Su.

A potential slowdown in AI data center spending remains a risk, which could delay chip deployments and potentially reduce orders. But looking out to 2030 and beyond, the growing use of AI agents, including consumer applications like Meta Platforms' Muse, points to the need for more chips and data center capacity.

AMD's nearer-term demand is well mapped out. Su said AMD has planned its ramp jointly with customers, including land, power, and buildings, so "we know where the GPUs are going." Meta, Oracle, OpenAI, Microsoft, and Anthropic are all running AI models and workloads on AMD's solutions.

At 28x 2027 earnings estimates, against analysts' expected 67% annualized earnings growth, AMD's valuation leaves room for the stock to outpace the market through 2030.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Meta Platforms, Microsoft, and Oracle. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.