AMD CEO Lisa Su Just Delivered Incredible News for Investors

AMD (NASDAQ: AMD) hasn't been a leader in the artificial intelligence (AI) computing race. That honor has belonged to Nvidia, but AMD hasn't given up. It has released several innovative computing units and increased its software's capabilities to make AMD's products a viable alternative to Nvidia.

Only time will tell how successful these products are, but CEO Lisa Su just revealed an incredible projection that has AMD skeptics (including myself) considering investing in the stock. Below, I'll take a look at what AMD just revealed for investors and examine the implications for its stock.

Image source: AMD.

AMD's business is less concentrated than Nvidia's in data centers

Although AMD and Nvidia have multiple business units, the latter is far more concentrated in data centers than the former. During Q3 2025, data center revenue made up 49% of AMD's total revenue. Its client and gaming segment, which captures OEM hardware and aftermarket gaming PC upgrades, totaled 44% of revenue, and embedded processors were 9%. That's a stark contrast to Nvidia, where 88% of revenue came from data centers.

While the data center boom has been great for Nvidia, it also places the company in a precarious situation. Should the AI hyperscalers slow down their massive AI spending spree, there'll be more of an impact on Nvidia than AMD.

This makes Nvidia's stock inherently more risky than AMD's. However, AMD would still be heavily affected by a slowdown, since nearly half its revenue comes from data center-related hardware. Fortunately, AMD doesn't see data center spending slowing anytime soon.

At AMD's Financial Analyst Day, the company revealed some long-term growth targets that indicate massive growth is still on the horizon. This makes the stock an intriguing buy at these price points.

AMD projects strong growth in the future

Over the next five years, AMD believes that its data center business can grow at a 60% compound annual growth rate (CAGR). That's an incredible growth rate and marks a massive acceleration from today's growth levels.

In Q3 2025, AMD's data center business rose 22% year over year. The company clearly believes that its latest product launches place it on the same playing field as Nvidia and would indicate that there's still a ton of growth left in the data center space.

AMD took a far more conservative growth projection for its other two segments. They believe that embedded and client and gaming can each grow at a 10% CAGR over the next five years, which will decrease AMD's growth rate significantly. Overall, it expects a CAGR of 35% over the next five years, with non-GAAP earnings per share exceeding $20.

Those are monster projections that will have any investor excited, but what does that mean for the company's share price?

If AMD has an ending valuation of 30 times earnings, that would price AMD's stock at $600 per share. The company's stock currently trades for about $250, so this would indicate nearly 150% growth in five years for the stock. That's easily a market-crushing return, so if you don't own AMD shares, now may be the time to initiate a position.

One item that will change over the next five years is AMD's balance across its various business units. If you appreciate how AMD is a more balanced investment than Nvidia, that factor will be wiped out if AMD grows its data center revenue at a CAGR of 60% over the next five years while its other businesses increase at a 10% rate.

Although AMD has been fairly dormant during the AI revolution, it's starting to wake up. It's unlikely that AMD will dethrone Nvidia completely, but it may be able to capture a sizable chunk of the market and give investors a great return on their investment along the way.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.