Instinct GPUs Drive Data Center Growth: What's Ahead for AMD Stock?

Advanced Micro Devices’ AMD data center AI business is driven by strong demand for Instinct MI350 series and MI300 series GPUs. Oracle’s ORCL launch of MI355X instances, which deliver high performance for real-time inference and multimodal training workloads on Oracle Cloud Infrastructure’s (OCI) zettascale supercluster, is expected to drive further growth. OCI will launch the first publicly available AI supercluster using AMD’s Helios rack design, featuring Instinct MI450 GPUs, EPYC Venice CPUs and Pensando Vulcano networking.The MI350 series has gained traction among neocloud providers, including Crusoe, DigitalOcean, TensorWave and Vultr, among others. The MI300 series is gaining rapid adoption among developers. IBM and Zyphra, as well as Cohere, are now using the MI300X GPU series. Zyphra’s ZAYA1 recently became the first large-scale Mixture-of-Experts model trained entirely on AMD’s Instinct MI300X GPUs, Pensando networking and ROCm open software. New partners like Character.AI and Luma AI are now running production workloads on the MI300 Series. OpenAI selected AMD as a preferred partner to build 6 gigawatts (GW) of next-generation AI computing capacity. The rollout will begin with 1 GW of AMD Instinct MI450 GPUs in the second half of 2026.AMD now expects the data center total addressable market to hit $1 trillion by 2030, suggesting a CAGR of more than 40% from roughly $200 billion estimated in 2025. AMD expects its data center AI revenues to see a CAGR of more than 80% over the next 3-5 years, driven by strong demand for instinct GPUs (MI450 Series and Helios rack-scale solutions) and expanding clientele that includes multiple hyperscalers as well as sovereign opportunities. Overall data center business revenues and total revenues are expected to see a CAGR of more than 60% and greater than 35%, respectively, over the same time frame.AMD expects Data Center revenues to grow double-digit both on a year-over-year and sequential basis in the fourth quarter of 2025, driven by a strong portfolio.Tough Competition Hurts AMD’s AI ProspectsNVIDIA NVDA and Broadcom AVGO are major competitors in the data center space. NVIDIA is at the center of AI computing, with its products widely used across data centers, gaming and autonomous vehicles. The company’s newer Hopper 200 and Blackwell GPU platforms are being adopted quickly as customers work to grow their AI infrastructure. Broadcom is benefiting from strong demand for its networking products and custom AI accelerators (XPUs). XPUs accounted for 65% of AI revenues in the third quarter of fiscal 2025. Consolidated backlog hit $110 billion, and the company has secured more than $10 billion of orders for AI racks based on XPU demand.AMD’s Share Price Performance, Valuation & EstimatesAMD shares have jumped 53.2% on a trailing 12-month basis, outperforming the broader Zacks Computer and Technology sector’s return of 27.6%.AMD Stock’s Performance Image Source: Zacks Investment ResearchAMD stock is overvalued, with a forward 12-month price/sales of 8.38X compared with the broader sector’s 6.73X. AMD has a Value Score of F.AMD Valuation Image Source: Zacks Investment Research The Zacks Consensus Estimate for fourth-quarter 2025 earnings is pegged at $1.31 per share, down by a penny over the past 30 days, suggesting 20.18% growth from the figure reported in the year-ago quarter.  Advanced Micro Devices, Inc. Price and Consensus Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote AMD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks