AMD CEO Lisa Su predicts 35% Annual Revenue Growth Fueled by AI Demand
AMD CEO Lisa Su said on Tuesday that the company’s overall revenue growth would expand to about 35% per year over the next three to five years, driven by “insatiable” demand for artificial intelligence chips.
Su said that much of that would be captured by the company’s AI data center business,which it expects to grow at about 80% per year over the same time period,on track to hit tens of billions of dollars of sales by 2027.
“This is what we see as our potential given the customer traction, both with the announced customers, as well as customers that are currently working very closely with us,” Su told analysts.
Ultimately, Su said that AMD could be able to achieve “double-digit” share in the data center AI chip market over the next three to five years.
AMD shares fell 3% in extended trading. Shares rose in extended trading when AMD said its gross margins in coming years would be between a range of 55% to 58%, better than analysts had expected.
The AI chip market is currently dominated by Nvidia which has over 90% of the market share, according to some estimates, and which has given the company a market cap of over $4.6 trillion, versus AMD’s roughly $387 billion valuation.
AMD is holding its first financial analyst day since 2022, as the company has found itself at the center of a boom in data center spending for AI.
While companies are spending hundreds of billions of dollars in total on graphics processing unit (GPU) chips to build and power artificial intelligence applications like OpenAI’s ChatGPT, they are also looking for altern
AMD raises AI Chip Market Forecast to $35 Billion by 2030
AMD now projects the total addressable market for artificial intelligence (AI) chips to reach $35 billion by 2030, significantly up from its previous estimate of $500 billion in 2028. This revised forecast reflects a robust 40% annual growth rate in the AI chip sector, according to the company’s recent statements. [https://www.cnbc.com/2024/06/18/amd-raises-ai-chip-market-forecast-to-35-billion-by-2030.html]
AMD reported $5 billion in AI chip sales for its fiscal year 2024. While this represents significant growth, it’s vital to note that the $35 billion figure includes sales from central processing units (CPUs) alongside dedicated AI accelerators like graphics processing units (GPUs). CPUs, such as AMD’s Epyc series, are essential components of computers but differ from GPUs, which are specifically designed to accelerate AI workloads. [https://www.cnbc.com/2024/06/18/amd-raises-ai-chip-market-forecast-to-35-billion-by-2030.html]
AMD’s Epyc CPUs remain a core revenue driver for the company. In the CPU market, AMD primarily competes with Intel and companies utilizing Arm-based processor designs. AMD also manufactures chips for gaming consoles, networking equipment, and other specialized devices. [https://www.cnbc.com/2024/06/18/amd-raises-ai-chip-market-forecast-to-35-billion-by-2030.html]
During a shareholder update on Tuesday, AMD CEO Lisa Su emphasized the strength of the company’s overall business, stating, “The other message that we want to leave you with today is every other part of our business is firing on all cylinders, and that’s actually a very nice place to be.” This indicates that while AMD is heavily focused on expanding its AI capabilities, its traditional businesses are also experiencing growth. [https://www.cnbc.com/2024/06/18/amd-raises-ai-chip-market-forecast-to-35-billion-by-2030.html]
Understanding the Components:
* AI Chips: Specialized processors designed to accelerate machine learning tasks. GPUs are commonly used for AI, but dedicated AI accelerators are also emerging.
* CPUs (Central Processing Units): the “brain” of a computer, responsible for general-purpose processing.While CPUs can handle some AI tasks, they are not as efficient as GPUs or dedicated AI accelerators.
* GPUs (Graphics Processing Units): Originally designed for rendering images, GPUs have become powerful tools for AI due to their parallel processing capabilities.