Moomoo analysis examines AMD’s long-term outlook

AMD has provided multi-year financial targets centred on data centre expansion and rising demand for AI-related workloads. The projections cover expected revenue growth, margin goals and earnings targets, along with how its agreement with OpenAI may shape performance across the next five years.

The assessment forms part of ongoing market commentary published by Moomoo, which is expanding the availability of its analysis to users in New Zealand and Australia.

Market context

Industry forecasts show AMD's data centre revenue remains smaller than that of its two largest competitors. Analyst estimates place NVIDIA's third-quarter data centre revenue at USD $48.99 billion. Broadcom reported USD $5.2 billion in AI-related revenue for its latest quarter. Intel recorded USD $4.12 billion in data centre and AI revenue during the same period.

AMD reported USD $4.34 billion in third-quarter data centre revenue. Fourth-quarter projections indicate this could reach USD $4.95 billion.

Growth targets

AMD aims for revenue growth above 35% annually over the next three to five years. It expects a non-GAAP operating margin above 35% and is targeting non-GAAP earnings per share above USD $20 within the same timeframe.

The company posted a non-GAAP gross margin of 54% for the third quarter and guided approximately 54.5% for the fourth quarter.

Segment outlook

Management expects data centre revenue to grow more than 60% annually and anticipates data centre AI revenue to surpass 80% annual growth. Long-term double-digit growth is forecast across the embedded, client and gaming segments.

These divisions form part of the company's strategy to maintain stability across its product mix as data centre demand evolves.

OpenAI agreement

AMD's long-term modelling is heavily influenced by its agreement with OpenAI. The structure provides warrants for up to 160 million shares at a strike price of USD $0.01. Vesting conditions include deployment milestones ranging from 1 to 6 gigawatts and a series of future share-price thresholds, with the final tranche requiring a price of USD $600.

The commitments cover full rack-level systems rather than individual accelerators, providing multi-year demand visibility.

Modelling referenced in the analysis assumes a 2025 revenue base of USD $34 billion and a 35% compound annual growth rate. Under these assumptions, cumulative revenue between 2026 and 2030 could total approximately USD $456 billion, with earnings per share rising from USD $3.97 to USD $20.

Revenue scenarios

A potential delivery sequence of 1, 1, 1.5, 1.5 and 1 gigawatts from 2026 to 2030 could generate between USD $82 billion and USD $195 billion in cumulative revenue, depending on pricing. These figures would represent between 18% and 43% of projected five-year revenue.

The modelling indicates that dilution from the warrant structure would have its greatest impact in the early stages of the agreement.

Margin assumptions

AMD expects margin expansion to be driven by a shift towards higher-value products and the growing contribution of AI-focused systems. The outlook assumes continued progress in rack-scale deployments and sustained competitiveness across data centre computing.

Sector comparison

NVIDIA and Broadcom continue to lead the wider market, reporting year-on-year growth above 50% in core AI-related segments. AMD now exceeds Intel in data centre revenue but remains smaller than both NVIDIA and Broadcom.

Strategic reliance

The projections highlight AMD's dependence on the scale and timing of the OpenAI delivery programme. Rack-scale system volumes and pricing will form a significant part of its ability to reach the targets outlined in the long-term model.

Moomoo app access

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