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AMD shares jump as AI-driven data-center strength fuels growth outlook
AMD shares rose 3 per cent in early trading after the chipmaker forecast revenue growth of more than 80 per cent in 2027, signalling confidence in sustained demand for AI computing. Its outlook suggests that spending is benefiting server processors as well as AI accelerators, potentially broadening the market beyond Nvidia and strengthening AMD’s position as an alternative.
AMD’s third-quarter data-centre revenue climbed 97 per cent to $8.55 billion, exceeding analysts’ $8.20 billion estimate. The company’s shares have gained about 126 per cent this year, and it trades at roughly 31 times forward earnings, compared with 14 times for Nvidia and 16.5 times for Broadcom. Analysts see scope for further market-share gains, though some caution that server CPU growth may be constrained by an industry-wide shortage.
In short
- AMD shares gained 3 per cent after a stronger growth forecast.
- Data-centre revenue rose 97 per cent to $8.55 billion.
- AMD expects overall revenue to grow more than 80 per cent in 2027.
Explained simply
Advanced Micro Devices, or AMD, is a US chipmaker whose products include processors for servers and specialised chips that help run artificial-intelligence systems. Data centres use both kinds of chips: processors manage general computing tasks, while AI accelerators handle demanding workloads such as training and running AI models.
Nvidia is the leading supplier of AI accelerators, while AMD is one of the companies seeking to offer an alternative. Demand for AI services has prompted technology firms to invest heavily in data centres, creating potential growth for several types of chip.
AMD’s prospects matter to investors and to the wider semiconductor industry because sustained demand could affect which companies supply those data centres. The pace of growth may also depend on whether chipmakers can meet demand and how much customers continue to spend.
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