AMD says its data center revenue will jump 60% over the next 3 to 5 years

AMD (AMD) says it expects to see its data center revenue increase 60% over the next three to five years, up from $16 billion in 2025, as the company pushes deeper into the AI space and works to steal share from rival Nvidia (NVDA).

The outlook comes after AMD CEO Lisa Su said the company sees the total addressable market for AI data centers increasing to $1 trillion over the next five years during AMD’s Financial Analyst Day in New York Tuesday. That number includes everything from GPUs and CPUs to networking equipment.

According to AMD CFO Jean Hu, the company’s overall revenue will jump 35% over the next five years from $34 billion in 2025. The majority of that revenue will come from AMD’s data center business.

Hu projects AMD’s gross margins will be between 55% and 58% over the next three to five years, while operating margins will be more than 35% during the period.

AMD is riding a wave of big data center announcements, including a 6-gigawatt deal with OpenAI and a plan to provide Oracle with 50,000 chips. Both projects will kick off in 2026.

While Su didn’t announce any new deals on Tuesday, she did mention that the company sees opportunities for multiple gigawatt-scale projects using AMD’s MI450 series chips and Helios rack-scale offerings across hyperscalers, AI-native companies, and sovereign AI businesses.

Analysts, however, have raised questions about how companies will be able to power their AI data center plans and whether OpenAI will be able to pay for AMD’s GPUs.

Su replied that she wouldn’t bet against the AI giant.

“This is a very unique moment in AI, and we shouldn’t be shortsighted in thinking about, ‘Hey, are you going to see returns in a couple of quarters, or are people going to be interested in financing it?’ If the AI usage grows as much as we expect, I think there’s going to be plenty of financing,” Su added.

In addition to its next-generation MI450 series chips, AMD says it’s also working on its MI500 series data center processors, though it didn’t provide many details on their capabilities.

Beyond its GPUs, AMD says its data center CPUs are also expected to drive significant growth going forward to capture as much as 50% of server revenue market share, up from 40% today.

AMD also says it anticipates more than 10% revenue growth in its client market, which includes things like gaming and PC chip sales, over the next five years.

AMD is aiming to do that by stealing increased market share from Intel (INTC) as that company continues to work through its multiyear turnaround effort.