AMD’s Growth Prospects Amid Market Challenges
Advanced Micro Devices (NASDAQ: AMD) is positioning itself for significant growth in the artificial intelligence (AI) accelerator segment, currently dominated by Nvidia. AMD’s management forecasts a 60% compound annual growth rate (CAGR) for its data center division over the next five years, which constitutes approximately 47% of its revenue. In Q3, AMD reported a 22% year-over-year increase in data center revenue.
Despite the ambitions, analysts predict AMD’s earnings per share (EPS) estimates for 2026 will range between $5.36 and $8.02, notably under the EPS of $10 that would be necessary to justify a doubling of its stock price to approximately $500 per share. The company’s profit margins are also currently lower than Nvidia’s, making the path to significant stock growth uncertain.
