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AMD's Analyst Day and AI

November 12, 2025


Advanced Micro Devices (AMD) held its financial analyst day yesterday.   AMD is the main competitor to Intel, making computer chips for PCs and high-end servers.   AMD has taken significant market share from Intel over the last several years by producing more powerful chips at the higher end of the market.  These faster chips are in high demand for servers installed in AI data centers.  


As such, CEO Dr. Lisa Su forecasted that AMD revenue growth will grow +35% per year over the next 3-5 years.  She cited "insatiable" demand, saying the market for AI data center parts will reach $1 trillion per year in 2030.   Whoah nellie!  AMD is up +8% at the moment.


Interestingly, however, most of the other AI-related stocks are down today.   Below is a stock chart showing the average performance of our AI basket.  The group jumped a bit in late October, but it has now pulled back.  


Anecdotally, there seems to be an increasing number of articles and commentary around the sustainability of the demand wave for AI spending.  The most common worry is that companies like OpenAI (maker of ChatGPT) are placing hundreds of billions in orders for computing power and equipment.  Just today, Anthropic (the maker of Claude AI) announced a commitment to build $50 billion worth of AI data centers in the US.  


The issue is that these AI companies themselves have yet to generate any meaningful revenue.  So it begs the question: who’s going to pay for all this stuff?  So far, it seems to be the cloud providers, bondholders, and AI private investors.


But if all this AI spending ends up being a mirage, this will be the moment in the movie where the people in the theatre are watching and say: “How did they not see it coming?!”   Well, we see it.  But it’s not clear!   I’m sure the movie version will see it differently.

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