A chipmaker that once seemed to be steadily gaining ground has lost some of its footing in recent weeks, as its shares slid amid soft personal computer sales and doubts about its place in the race for artificial intelligence hardware. A December 2024 opinion essay from The Motley Fool argues that the market is looking too narrowly at a single bad stretch, pointing to a forecast of rapid long-term expansion in AI chips and to signs that AMD's data center business is gaining weight in the company's overall picture. Whether that bet pays off depends on a question the piece itself leaves open: whe
AMD Stock Could Soar Over Eight Years, Driven by Data Center and AI Chip Growth
Weak PCs and AI worries weigh on AMD, but one writer sees eight years of growth
Mark
Why does a piece like this deserve a read when AMD's numbers look soft?
Mimi
Because it names the weak spots itself: 10% revenue growth against Nvidia's triple digits, gaming down 58%, embedded down 38%. Then it argues the AI chip market matters more than those.
Mark
What's the core of the bullish case?
Mimi
A forecast of 38% annual growth in AI chips through 2032, plus customers like Microsoft and Meta turning to AMD when Nvidia supply ran short.
Luke
That 38% is one research firm's forecast. It's not a result, and the piece doesn't test it.
Mark
And the 107% data center growth?
Luke
The article ties it to the first nine months of 2023, while everything around it is 2024. It's likely a slip, but it's unresolved, so I wouldn't lean on that number.
Mimi
The 48% share of revenue from data center is the more telling figure, set beside Nvidia's 87%.
Luke
Fair, but saying AMD could eventually match 87% is the author's speculation. Nothing in the piece shows how it gets there, and he admits other segments recovering would lower the share.
Mark
Does the author have a stake?
Mimi
He holds AMD shares, and The Motley Fool recommends it too, per the disclosures.
Luke
Which makes this an opinion with a position behind it, not independent analysis. Read it as an argument, not a finding.
Der Puls
- AMD shares have sold off as weak PC demand and fears of losing ground to Nvidia in AI accelerators weigh on investor confidence.
- Nine-month revenue rose only 10% to $18 billion, while Nvidia posts triple-digit gains and AMD's gaming and embedded businesses shrink sharply.
- Analysts and writers are pushing back, arguing a forecast 38% annual growth rate in AI chips could lift AMD's data center segment over the coming years.
- Supply shortages at Nvidia have sent customers like Microsoft and Meta toward AMD, and data center revenue is climbing toward nearly half of total sales.
- The outlook remains contested: the case rests on promotional opinion rather than independent analysis, and it hinges on whether data center growth can outweigh continued declines elsewhere.
A chipmaker that once seemed to be steadily gaining ground has lost some of its footing in recent weeks, as its shares slid amid soft personal computer sales and doubts about its place in the race for artificial intelligence hardware. A December 2024 opinion essay from The Motley Fool argues that the market is looking too narrowly at a single bad stretch, pointing to a forecast of rapid long-term expansion in AI chips and to signs that AMD's data center business is gaining weight in the company's overall picture. Whether that bet pays off depends on a question the piece itself leaves open: whether growth in one part of the business can outrun the decline in the others.
Advanced Micro Devices has had a rough few weeks. Its stock has fallen, and the likely causes are weak sales of personal computers and a growing worry that the company cannot keep pace with Nvidia in the market for artificial intelligence accelerators. Into that gloom comes a Motley Fool opinion piece, written by Will Healy in mid-December 2024, arguing that the selloff overlooks a larger trend.
The skeptic's case is easy to make, and the piece makes it. Revenue for the first nine months of 2024 reached $18 billion, up 10%, far behind Nvidia's triple-digit growth. Gaming revenue fell 58% and embedded revenue fell 38% over the first three quarters.
Healy's answer lies in the AI chip market, which he expects to grow at a 38% annual rate through 2032. Nvidia's chips have been scarce, and customers such as Microsoft and Meta have turned to AMD. Data center revenue, which includes AI accelerators, has been climbing and now makes up 48% of AMD's sales, against 87% at Nvidia. Healy believes that share could keep rising, even if recovery in the other segments dilutes it.
The piece should be read as a promotional prediction. Its author holds AMD shares, and the publisher has its own stakes in the companies discussed. Watch two things: whether data center growth can outpace the slump in gaming and embedded, and whether the gap with Nvidia closes or widens.
Advanced Micro Devices has had a rough few weeks on the market. Its stock has sold off, and the likely reasons are weak PC sales and worry that the company will struggle to compete in the market for artificial intelligence accelerators. That is the setting for a Motley Fool opinion piece, published in mid-December 2024 and written by Will Healy, which argues the selloff misses a bigger trend.
The case against AMD is easy to lay out, and the piece does lay it out. Revenue for the first nine months of 2024 came to $18 billion, up 10%. Its main rival, Nvidia, has been posting triple-digit revenue increases. Two other parts of AMD's business have shrunk sharply: gaming revenue is down 58% and embedded revenue is down 38% across the first three quarters of the year.
Healy's counterargument rests on the AI chip market. He cites a forecast from Allied Market Research of a 38% compound annual growth rate for AI chips through 2032, which he reads as a sign of very large growth over an eight-year span. He argues that investors should not write off AMD's AI accelerator business, which he says could fundamentally change the company.
He also points to how demand has been playing out. Nvidia accelerators have been in short supply, and customers such as Microsoft and Meta Platforms have turned to AMD as a result. Data center revenue, which includes the AI accelerators, grew 107% in the first nine months. The source text attaches that figure to 2023, which appears to be a slip, since the surrounding comparisons concern 2024.
The piece then turns to what share of revenue the data center business represents. For AMD, it has made up 48% of revenue so far this year. For Nvidia, data center accounts for 87% of revenue in the first nine months of fiscal 2025, a period that ended October 27. Healy suggests AMD's data center segment is on track to grow as a share of its sales, perhaps eventually matching Nvidia's 87%.
He acknowledges a wrinkle: if AMD's other segments recover, data center's percentage of revenue could fall. His view is that this would not change the conclusion. Whatever the source of the revenue, he writes, improving growth likely means the stock will do well over the next eight years.
The article should be read for what it is. It is a prediction piece that first ran at The Motley Fool, and it carries the usual disclosures. Healy holds positions in AMD, and The Motley Fool has positions in and recommends AMD, Meta, Microsoft and Nvidia. A promotional note for the company's Stock Advisor service also says its analyst team did not include AMD among its current top 10 stock picks.
What to watch is whether data center sales keep lifting AMD's overall growth enough to offset the declines in gaming and embedded, and whether the company's gap with Nvidia narrows or widens as the AI chip market expands.
Bemerkenswerte Zitate
Regardless of the revenue source, improving growth likely means AMD stock will prosper over the next eight years.— Will Healy, The Motley Fool (paraphrased)
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