At its Financial Analyst Day, AMD (AMD) shared bold long-term targets and a strategy to lead the $1 trillion compute market. These targets include a greater than 35% revenue compound annual growth rate (CAGR) and adjusted earnings per share (EPS) over $20. The company plans to achieve these goals by focusing on AI and high-performance computing, especially in data centers, embedded systems, and gaming. AMD stock jumped 4.5% in the after-hours trading session.
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Among other goals, AMD is projecting a free cash flow margin of over 25%, adjusted operating margin exceeding 35%, and an adjusted gross margin of between 55% and 58% over the next three to five years.
In the market share front, AMD aims to capture over 50% of the server CPU market, more than 40% of the client revenue, and above 70% in the embedded market.
CEO Dr. Lisa Su said, “AMD is entering a new era of growth fueled by our leadership technology roadmaps and accelerating AI momentum.”
Segment-Specific Growth Goals
The company shared big goals for its main business areas, based on its product roadmap.
- Data Center Business: AMD aims for a revenue CAGR of over 60% in its data center business and more than 80% specifically in data center AI, supported by strong momentum for its Instinct GPUs and upcoming “Helios” systems. Also, it projects a clear path to “tens of billions of dollars of revenue” in the data center by 2027.
The Instinct MI350 GPUs are AMD’s fastest-growing product ever, already deployed by major cloud providers like Oracle (ORCL). The upcoming MI450 and MI500 series aim to push AI performance even further, starting in 2026 and 2027. - Embedded and Client and Gaming Businesses: The company projects a revenue CAGR above 10% for its embedded, client, and gaming businesses.
In the Client & Gaming unit, AMD has expanded its AI PC lineup 2.5x since 2024, with Ryzen chips now powering over 250 platforms. New “Gorgon” and “Medusa” processors are expected to deliver up to 10x AI performance gains.
Moving to the Embedded segment, AMD’s adaptive computing portfolio spans FPGAs, embedded x86 chips, and semi-custom solutions. Since 2022, it has secured over $50 billion in design wins.
Is AMD a Buy or Sell Now?
Turning to Wall Street, AMD stock has a Moderate Buy consensus rating based on 27 Buys and 10 Holds assigned in the last three months. At $278.09, the average AMD price target implies a 17.08% upside potential.
