AMD shares surged 9% on Monday, fueled by a potent combination of ambitious market predictions and the unveiling of powerful new artificial intelligence (AI) chips designed to challenge Nvidia’s dominance.
This surge in investor confidence comes as AMD’s CEO, Lisa Su, painted a remarkably optimistic picture for the AI processor market, which she believes will skyrocket to over $500 billion by 2028.
Booming AI market
AMD hosted the “Advancing AI 2025” conference, where they unveiled their new artificial intelligence server for 2026.
During the event, Lisa Su announced that the AI processor market, valued at $45 billion in 2023, is projected to grow at an astonishing annual rate of over 60% to surpass half a trillion dollars within the next three years.
This bullish forecast alone served as a significant impetus for investors, highlighting a massive growth opportunity that AMD is aggressively targeting.
New chips to challenge Nvidia
Central to AMD’s strategy to capture a substantial share of this booming market is its newly unveiled MI350 Series chips.
Su said the MI355 chips are 35 times faster than its predecessors.
These next-generation accelerators are poised as direct competitors to Nvidia’s leading AI chips, including the B200 and GB200.
AMD said the MI355 beats Nvidia’s B200 and GB200 products in running AI software and is par or exceeds them in writing code.
The company added that the purchasers can reduce their costs with AMD products compared to Nvidia’s.
This strategic product launch and optimistic market outlook are crucial for AMD, particularly in the context of earlier financial guidance that might have tempered investor expectations.
The company had previously faced scrutiny over slower growth projections in certain segments.
However, the MI350 series, coupled with a redefined AI market opportunity, provides powerful momentum to counteract these concerns.
According to IDC, Nvidia has 85.2% market share in AI accelerators while AMD has 14.3%. Intel has 0.5%.
While Nvidia’s AI accelerator business has helped it gain against long-time rival Intel, Nvidia has surpassed both of them.
AMD makes multiple billions of dollars from AI processors, whereas Nvidia generates more than $100 billion per year.
Su added that AMD is releasing the MI400 chips next year. The MI400 chips will be used to make the Helios server.
The company executives said the Helios will have 72 of AMD’s MI400 series chips, which makes them comparable to Nvidia’s NVL72 servers.
OpenAI’s Sam Altman also spoke at the event with Su. He said the company behind ChatGPT is working with AMD on the MI400 chip to improve its design for AI work.
What is the market expectation from AMD
According to TipRanks, 22 analysts among 33 analysts gave the stock a buy call, while 11 gave a hold call.
The consensus target is $129.93, which is only 2.53% up from the current levels.
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