Lisa Su’s company has spent a decade climbing back toward the top of the chip industry. On September 21, for a few hours at least, it got there.
AMD’s market value crossed $1 trillion in intraday trading, the first time the company has touched that mark. The shares closed up 9.95 percent at $615.52, leaving the company’s value at roughly $996.7 billion, just short of the line, after a five-day rally that swept away months of doubt about whether the chipmaker could keep pace with Nvidia.
The surge made AMD the fourth American chip company to reach the threshold, after Nvidia, Broadcom and Micron. It arrived not on a single announcement but on a steady accumulation of evidence that AMD’s bet on data-center computing is paying off faster than its critics expected.
The clearest evidence came from the second quarter. AMD’s data-center revenue reached $6.7 billion, up 107 percent from a year earlier, and the segment now accounts for 58 percent of total revenue. The business, which spans the Epyc server processors and Instinct AI accelerators that power much of the AI buildout, has become the engine of the company.
At the same time, AMD has been telling investors the market is larger than it previously said. The company raised its forecast for the server CPU market to about $220 billion by 2030, up from a prior estimate of $120 billion, according to company presentations. Chief Financial Officer Jean Hu told analysts in early September that AMD now sees a $3 trillion total addressable market for high-performance computing by the end of the decade.
The optimism rests on a shift Su has been describing for months. As artificial intelligence moves from training models to running them, the work demands far more ordinary processing power, not only the specialized accelerators Nvidia sells. Su has told analysts that inference and agentic AI are pushing the ratio of CPUs to GPUs in data centers toward one-to-one, a change that plays to AMD’s historic strength in server CPUs.
The company’s roadmap backs up that conviction. AMD has said it will ship new products in each of the next three years, including the MI450 line of AI accelerators and a double-wide Helios rack in the third quarter of this year, followed by the MI500 series in 2027. The company has claimed the MI450 will carry more memory and scale-out bandwidth than Nvidia’s current Rubin chips.
AMD is also raising prices. The company said it would increase the price of its AI chips and related products by about 10 percent in the fourth quarter, a sign that demand is strong enough for customers to absorb the cost.
The rally lifted the entire chip sector. Arm rose 15.47 percent, and Nvidia climbed 2.3 percent to a market value of about $5.49 trillion. Investors are treating the AI buildout as a rising tide, and AMD’s re-rating is part of it.
The valuation, though, is demanding. At the current share price, AMD trades at about 156 times earnings, a multiple that prices in years of continued growth and leaves little room for a stumble. Analysts said the stock now depends on the company meeting its own forecasts for a market that has only begun to be built.
Su took over AMD in 2014, when the company was fighting for survival after a decade of losses. She spun out its money-losing chip factories and redirected its engineers toward server processors, a bet that paid off as cloud providers began buying Epyc chips in bulk. At an analyst day last November, she told investors the global data-center market would be worth $1 trillion by 2030 and that AMD expected to reach $100 billion in annual data-center revenue within five years. The recent numbers suggest that target no longer looks like a stretch.
The question hanging over the stock is whether AMD can narrow the remaining gap with Nvidia, which remains the dominant supplier of AI accelerators and controls the software layer most developers build on. AMD’s Instinct line has won a string of cloud customers, but Nvidia’s CUDA platform and the habits of the engineers who learned on it still give the larger company an edge that analysts said will be hard to erode. Su has argued that the shift toward inference, where the work is less specialized, levels the field, and the price increases suggest customers are not pushing back.
The stock’s climb has been sharp enough to invite its own skeptics. AMD was worth less than $200 billion at the start of 2023, when the AI boom was taking hold, and its share of the accelerator market remains a fraction of Nvidia’s. Bulls argue the company is still early in a cycle that will lift every supplier of data-center silicon; bears say a valuation of 156 times earnings already assumes most of that future.
For now, the market is choosing to believe. The five-day run that carried AMD past $1 trillion was built on earnings, on raised forecasts and on price increases all pointing in the same direction. Whether the company stays above the line will depend on the quarters ahead.
