Advanced Micro Devices (NASDAQ:AMD) expects its data center revenue to rise 60% over the next three to five years, up from $16 billion in 2025, as the company accelerates its expansion into artificial intelligence and challenges rival Nvidia (NASDAQ:NVDA). Shares of AMD surged more than 8% in early trading Wednesday following the announcement.
The outlook, presented during AMD’s Financial Analyst Day in New York, highlights CEO Lisa Su’s vision for capturing a greater share of the fast-growing AI infrastructure market. Su said the total addressable market for AI data centers will climb to $1 trillion over the next five years, encompassing GPUs, CPUs, and networking equipment.
Financial outlook and growth projections
According to AMD CFO Jean Hu, the company’s overall revenue is projected to grow 35% over the next five years, reaching approximately $46 billion by 2030. The bulk of that expansion will come from AMD’s data center division, powered by rising demand for AI-focused processors.
Hu also forecasted strong profitability metrics, with gross margins expected to range between 55% and 58% and operating margins exceeding 35% during the same period. The company’s long-term strategy focuses on scaling both GPU and CPU offerings to secure broader adoption among cloud providers, hyperscalers, and AI-native companies.
AMD’s recent partnerships signal growing momentum. The company has inked a 6-gigawatt data center deal with OpenAI (OPAI.PVT) and agreed to supply Oracle (NYSE:ORCL) with 50,000 chips starting in 2026. These projects, along with other large-scale AI infrastructure investments, are expected to anchor AMD’s next growth phase.
Expanding AI infrastructure footprint
While AMD didn’t announce new contracts during the event, Su emphasized ongoing discussions around additional gigawatt-scale projects leveraging its next-generation MI450 GPUs and Helios rack-scale systems. These offerings are aimed at major hyperscalers, sovereign AI initiatives, and dedicated AI firms.
AMD also confirmed it is developing its MI500 series of data center processors, though technical details remain under wraps. Beyond graphics chips, AMD expects its server CPU business to gain significant ground, targeting a 50% share of the global server revenue market — up from 40% currently.
In the client segment, which includes gaming and PC processors, AMD anticipates more than 10% revenue growth over the next five years as it continues to take market share from Intel (NASDAQ:INTC), which is still undergoing a multiyear restructuring effort.
Financing and energy challenges
Analysts have questioned whether AI firms like OpenAI will be able to finance such massive data center expansion and how companies will secure sufficient power to operate them. Su dismissed those concerns, emphasizing long-term demand potential. “This is a very unique moment in AI,” she said. “We shouldn’t be shortsighted in thinking about returns in a couple of quarters. If AI usage grows as much as we expect, there’s going to be plenty of financing.”
Su’s comments echo a broader industry belief that surging AI workloads will continue to justify record infrastructure spending. As data center capacity tightens worldwide, AMD’s performance and efficiency improvements could position it as a leading supplier for the next generation of AI hardware.
Stock performance and market positioning
AMD stock has gained 96% year to date and 61% over the past 12 months, outperforming Nvidia, which is up 43% and 32% over the same periods. Analysts attribute AMD’s rally to strong execution, diversification across computing segments, and investor optimism over its AI roadmap.
With data center expansion and AI chip demand accelerating, AMD’s strategy appears designed to capture a larger slice of an increasingly lucrative market. If the company delivers on its ambitious forecasts, it could further cement its position as the top challenger to Nvidia in the global AI race.
