Semiconductor shares rose in overnight trading. AMD up 6%; SOXL up 3%; Micron, Nvidia, Broadcom up 1%.
AMD (AMD) made several updates at its financial analyst day on Tuesday, including reiterating the theme that artificial intelligence spending is not likely to slow down anytime soon.
Speaking at the company's first analyst day since 2022, AMD CEO and Chairman Dr. Lisa Su updated the size of the total addressable market for the AI data center and now sees it hitting $1T by 2030, up from a prior view of $500B.
“I think we've been very consistent that high performance computing is the foundation of everything that's important,” Dr. Su said during the presentation. “We've added that AI and high performance computing because AI is such a large part of it. When we look at where we are today, AMD computing touches billions of people every day.”
Su, who has been at the helm of AMD since 2014, added that the rate and pace of change in AI is higher than anything she has seen before. “If you ask customers today, they say, 'We need to invest more in AI infrastructure.' There is a real belief that AI compute equates to intelligence.” She added that companies with the capability, particularly those with strong balance sheets, will have an “incremental advantage” compared to the competition. “There's just insatiable demand.”
Shares rose 3% in extended trading on Tuesday after the company said its gross margins would range between 55% and 58%, better than forecast.
AMD sees a clear path to hit “tens of billions of dollars of revenue” in 2027 in the data center, aided by its MI450 and Helios rack-scale solutions, Su said. There is also a “very clear” path to double-digit share in the data center AI market, with a compound annual growth rate of 80% over the next three to five years, Su added. By comparison, Nvidia (NVDA) is widely believed to have upwards of 90% of the data center AI market. As such, the overall revenue for the company should be a baseline of $35B for this year and grow at a compound annual growth rate of 35% or more over the next three to five years, Su added.
The AMD leader also noted that the company's custom design wins have expanded over the past 12 to 18 months. New design wins in aerospace & defense, communications, data center have totaled $45B, with the revenue set to ramp up in 2026 and beyond.
Su added that AMD's Instinct GPUs are now in seven of the top 10 AI companies, while its data center CPU business now commands 40% of the revenue share. She reiterated that AMD has gone from a two-year cadence to an annual cadence, and there will be a “huge step function” with the upcoming MI450 GPU AI accelerator.