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Published Date : 15/08/2025
AMD has made significant strides in the AI market, and with its innovative chip designs and strategic moves, it could soon become the next trillion-dollar company.
AMD has made significant strides in the AI market, and with its innovative chip designs and strategic moves, it could soon become the next trillion-dollar company.
Advanced Micro Devices (AMD) has evolved into a semiconductor powerhouse in recent years. Under the leadership of Lisa Su, it overtook longtime rival Intel in the PC market. Although Nvidia's success with the artificial intelligence (AI) accelerator market initially took AMD by surprise, AMD's efforts to catch up have made it an increasingly important company in that market.
Such innovations have also made AMD a prime candidate to join the 10 companies that now have a market cap above $1 trillion. Here's how it can reach that milestone, and why the path might be easier to achieve than many investors might assume.
At first glance, AMD might appear far away from that milestone since its $280 billion market cap means it is only 28% of the way toward that goal. However, that is not as far away from $1 trillion as it might appear. At the current market cap, it has to double in value less than two times to reach that point.
Moreover, a simple increase in popularity could get AMD to that point. Although its 99 price-to-earnings (P/E) ratio might make it appear pricey, it currently sells at a forward P/E ratio of 44. Thus, if it achieves some of the popularity that has boosted Palantir, a stock that sells at 623 times its earnings, multiple expansion alone could take it there.
More importantly, AMD is in a strong position to reach a $1 trillion market cap even if such hype does not materialize. The company's data center segment, which designs AI accelerators, generated just over $6.9 billion in revenue in the first half of 2025, around 46% of AMD's total. In comparison, Nvidia's data center segment made up 89% of the company's revenue in its most recent quarter.
Admittedly, AMD is significantly behind Nvidia in the AI accelerator market, and while AMD's MI350 chip has generated some interest due to its lower cost, it is hardly a threat to Nvidia's dominance. However, AMD plans to release the MI400 next year. With its integration with AMD's upcoming Helios rack-scale solution, some analysts believe it can become a competitive threat to Nvidia's upcoming Vera Rubin platform. Nvidia's CUDA software, which has previously cemented its dominance, also faces increased competitive threats. Such conditions could mean AMD is on the way to becoming a full-fledged competitor in the AI market.
Frequently Asked Questions (FAQS):
Frequently Asked Questions (FAQS):
Q: What is AMD's current market cap?
A: AMD's current market cap is $280 billion.
Q: How much revenue did AMD's data center segment generate in the first half of 2025?
A: AMD's data center segment generated just over $6.9 billion in revenue in the first half of 2025.
Q: What is the forward P/E ratio of AMD?
A: AMD currently sells at a forward P/E ratio of 44.
Q: What is AMD's upcoming AI accelerator chip called?
A: AMD's upcoming AI accelerator chip is called the MI400.
Q: What is the name of Nvidia's upcoming platform that AMD's MI400 aims to compete with?
A: Nvidia's upcoming platform that AMD's MI400 aims to compete with is called the Vera Rubin platform.
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