AMD Stock Jumps on Outlook. AI Growth Is Boosting Margins.

AMD stock is up 102% this year, compared with the 22% rise for the Nasdaq. (Courtesy AMD)

Advanced Micro Devices CEO Lisa Su is getting more optimistic about the long-term market opportunity for semiconductors.

On Tuesday, the executive offered a new revenue growth outlook above Wall Street’s expectations. Su said the company now expects to grow its revenue at more than 35% a year over the next three to five years, starting with a revenue baseline of $34 billion for 2025.

The current Wall Street consensus for AMD 2025 revenue is $33.8 billion with expected revenue growth of 30% for 2026, 34% for 2027, and 23% for 2028.

“We expect to really inflect in overall revenue growth over the next three to five years,” she said at AMD’s Financial Analyst Day in New York City.

Su also said the company’s data-center AI revenue should grow by more than 80% per year over the next three to five years. Late last year, she said the market for AI data center graphics processing units will grow by more than 60% a year and reach $500 billion by 2028.

Shares of AMD fell through much of the analyst day, closing Tuesday down 2.7% amid a broader selloff in technology and AI-focused stocks.

After the market closed, AMD’s Chief Financial Officer Jean Hu had more details to share, noting that AMD expects to increase operating margin from 24% this year to more than 35% over the next three to five years, resulting in a “clear path” to more than $20 in annual earnings per share. The current Wall Street estimate for AMD‘s 2028 EPS is $10.18.

Investors seemed more excited about the earnings-focused comments, pushing AMD up 2.5% in after-hours trading.

Last week, AMD reported better-than-expected earnings results for the September quarter and forecast current-quarter revenue above the Wall Street consensus at the midpoint.

On the call with analysts the evening of the earnings report, CEO Lisa Su said many customers are planning “substantially” larger CPU buildouts in the next few quarters to support higher AI demand. She said AMD’s AI business is on track to grow to tens of billions of dollars in annual revenue by 2027.

Last month, AMD announced a long-term deal to become a key supplier for OpenAI’s buildout of infrastructure for AI. The agreement entails OpenAI deploying six gigawatts of AMD graphics processing units, starting with one gigawatt of rack-scale MI450 GPU servers in the second half of 2026.

AMD stock is up 97% this year, compared with the 22% rise for the Nasdaq.

Write to Tae Kim at tae.kim@barrons.com