AMD AI Chip Stock Poised to Outperform Nvidia by 2030

Published Date : 21/08/2025 

While Nvidia has dominated the AI hardware market, AMD is positioned to deliver significant gains by 2030, thanks to its diversified portfolio and strong market presence in various AI applications. 

Nvidia has become the world's largest company thanks to its pioneering role in the artificial intelligence (AI) hardware market. Its market cap of $4.2 trillion and incredible returns of more than 1,310% in the past five years have made it a standout performer. However, investors may be wondering if Nvidia can continue to deliver such gains, especially given its high valuation and market cap. But there is another semiconductor stock that is benefiting from the adoption of AI on multiple fronts and has the potential to outperform Nvidia by 2030.

Advanced Micro Devices (AMD) has been overshadowed by Nvidia in recent years, with the stock registering much smaller gains of 99% compared to Nvidia's massive returns. This underperformance is partly due to AMD's smaller share of the AI data center market, where it controlled just 4% last year, compared to Nvidia's 92%. However, it would be a mistake to judge AMD's AI potential based solely on its data center business.

AMD is more diversified than Nvidia, offering processors and GPUs for personal computers, gaming consoles, and industrial applications such as robotics and factory automation. It also sells server processors deployed in data centers. These diverse markets are expected to drive robust growth for AMD over the next five years. A closer look at AMD's recent results for the second quarter of 2025 reveals that the company is already capitalizing on these opportunities.

Overall revenue increased by a healthy 32% year over year in the second quarter to a record $7.7 billion, and AMD expects another 28% increase in the current quarter. The secular growth opportunities in AI personal computers, server CPUs, and gaming markets are key factors driving AMD's momentum. For example, revenue in the AI personal computer market is projected to quadruple by 2030, according to a third-party report.

AMD has been gaining market share in the PC processor market, controlling 23.9% of the client CPU market at the end of the second quarter, up 2.8 percentage points from the prior year. Its revenue share increased by almost 10 points to 27.8%. The strong demand for AMD's AI-focused PC processors has been crucial in boosting its market share and pricing power. The company's focus on launching AI-capable PC processors is expected to further enhance its position in the client CPU market.

In the server processor space, AMD's Epyc chips are being used for AI workloads in data centers, with significant adoption by major tech companies like Alphabet's Google and Oracle. AMD's Epyc server chips are well-suited for running AI inference applications in the cloud. Given its strong customer base, including Microsoft, Meta Platforms, Amazon, and others, AMD's data center business is poised for outstanding growth over the next five years.

Additionally, the launch of next-generation gaming consoles from Microsoft and Sony is likely to supercharge AMD's growth. AMD is designing the semi-custom chips for these consoles, and the company historically experiences a significant boost in sales and earnings when new consoles are released. A similar surge in revenue and earnings is expected in the next five years.

Analysts forecast healthy growth in AMD's earnings through 2027, with an estimated 18% increase this year to $3.91 per share. If AMD can maintain a conservative annual growth rate of 15% in 2028, 2029, and 2030, its earnings could reach $11.30 per share by 2030. With a five-year forward earnings multiple of 31, a slight discount to the tech-laden Nasdaq-100 index's average earnings multiple of 33.6, AMD's stock price could hit $339 based on its projected earnings in 2030. This points to potential gains of 109% from current levels, higher than what Nvidia may deliver over the same period. 

Frequently Asked Questions (FAQS): 

Q: What is AMD's current market share in the data center GPU market?

A: AMD currently controls about 4% of the data center GPU market, compared to Nvidia's 92%.

Q: How has AMD's revenue grown in the second quarter of 2025?

A: AMD's revenue increased by 32% year over year in the second quarter of 2025, reaching a record $7.7 billion.

Q: What are the key markets driving AMD's growth?

A: The key markets driving AMD's growth include AI personal computers, server CPUs, and gaming consoles.

Q: How is AMD positioned in the server processor market?

A: AMD's Epyc server chips are well-suited for AI workloads and have gained significant adoption from major tech companies like Google and Oracle.

Q: What is the projected earnings per share for AMD by 2030?

A: Analysts project AMD's earnings per share to reach $11.30 by 2030, assuming a conservative annual growth rate of 15%. 

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