Advanced Micro Devices Inc. (NASDAQ: AMD) chief executive Lisa Su agrees that aggressively spending on artificial intelligence (AI) resembles a “gamble” in some ways.
But “it’s the right kind,” she added in a CNBC interview on Wednesday morning.
Su’s remarks arrive at a time when big tech’s aggressive infrastructure investments are starting to make investors – at least the more cautious ones – a bit nervous.
However, she firmly supported the strategy, saying it would only accelerate the pace of innovation.
At the time of writing, AMD stock is up well over 200% versus its year-to-date low in early April.
How AI spending will drive AMD stock higher
According to Lisa Su, tech companies have already started seeing the return on their AI spending.
In fact, she now expects “insatiable” demand for artificial intelligence chips to help AMD grow its revenue by 35% annually over the next three-to-five years.
The AI-focused data centre segment, Su told CNBC, could even grow by a whopping 60% annually through the end of this decade – adding AMD will secure a “double-digit” share of that market by 2030.
If realized, this would mark a dramatic shift in the competitive landscape and could justify a material re-rating of AMD stock in the years ahead.
What this revenue forecast really means for AMD shares
Let’s do the math. If AMD’s revenue grows at a 35% compound annualized rate for five years, it would more than quadruple by the end of this decade from about $34 billion in 2025.
Assuming the AI chips giant maintains or expands its profit margins and trades at a similar price-to-sales (P/S) multiple, the semiconductor stock would theoretically follow a similar trajectory.
Given that Advanced Micro Devices currently has a market cap of $423 billion, an over 4x increase in revenue implies a valuation north of $1.7 trillion (nearly $1,050 a share) – assuming no multiple compression.
That would place AMD shares in the same league as today’s tech mega-caps.
Of course, that’s a gross oversimplification that hinges on execution, competitive dynamics, and the overall macroeconomic environment – but the upside math, nonetheless, looks compelling for sure.
Should you invest in Advanced Micro Devices today?
While some investors are sounding alarms about an AI bubble, Su’s message is clear: this is a long-term structural shift, not a short-term hype cycle.
“The AI ecosystem is in a place where people are making bets,” she said, adding that companies must decide “which part of the stack” they want to own.
AMD has made its choice – deep investment in AI compute – and the market is starting to notice. If Su delivers on its growth targets, today’s “gamble” could look like tomorrow’s masterstroke.
Note that Wall Street also currently rates AMD stock at “overweight”.
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