AMD Shares Rise on Strong AI Chip Projections

2025-11-12

The BareStory

Shares of Advanced Micro Devices (AMD) rose by as much as 10% on Wednesday following optimistic growth projections from the company’s chief executive. The stock movement occurred after the company's financial analyst day on Tuesday.

CEO Lisa Su told analysts that AMD anticipates 35% annual revenue growth over the next three to five years, driven by what she described as "insatiable" demand for artificial intelligence chips. Su also stated that AMD projects it will capture a "double-digit" share of the data center AI chip market within the same timeframe. She characterized high spending on AI by large technology companies as "the right gamble."

The projections come amid broader market volatility and investor concerns about a potential AI bubble. More than $380 billion in AI spending was announced by major tech firms in recent earnings reports. In a separate development, Softbank announced on Tuesday that it had dissolved a nearly $6 billion stake in Nvidia in October to support its own AI investments. A person familiar with the matter stated this sale was not related to concerns about AI valuations.

Concerns about the sector's valuations were highlighted by recent actions from short-seller Michael Burry, who reportedly revealed bets against some AI-related software companies. Burry also accused major tech firms of understating depreciation expenses by extending the lifecycle of chips, a practice he allegedly called "one of the more common frauds of the modern era."

Left Perspective

The AI chip market is experiencing "insatiable" demand.
High levels of investment in AI are considered a sound strategy.
Positive market signals reflect investor confidence in the sector.

Right Perspective

There are broad concerns about a potential AI bubble.
Prominent investors are actively betting against AI-related companies.
Allegations of fraudulent accounting practices have surfaced.

Left Perspective

• The AI chip market is experiencing "insatiable" demand.

An optimistic outlook from AMD’s chief executive projects 35% annual revenue growth over the next three to five years. This growth is anticipated to be driven by extremely strong and sustained demand for artificial intelligence chips from large technology companies.

• High levels of investment in AI are considered a sound strategy.

Major tech firms have recently announced over $380 billion in AI spending, a move AMD's CEO described as "the right gamble." In line with this, AMD projects it will capture a "double-digit" share of the data center AI chip market within the next few years, signaling confidence in the sector's expansion.

• Positive market signals reflect investor confidence in the sector.

Following the optimistic projections, AMD's stock rose by as much as 10%, indicating strong investor support for the company's AI strategy. Furthermore, another major firm, Softbank, sold a large stake in Nvidia specifically to finance its own AI investments, with a source stating the move was not related to valuation concerns.

Right Perspective

• There are broad concerns about a potential AI bubble.

Despite optimistic corporate projections, the article notes that the high spending and rising valuations in the AI sector exist amid "broader market volatility." This context has fueled investor concerns about the possibility of an unsustainable AI bubble forming.

• Prominent investors are actively betting against AI-related companies.

Skepticism about the sector's health is highlighted by the reported actions of short-seller Michael Burry. He has taken financial positions that bet against the success of some AI-related software companies, indicating a belief that their valuations may be inflated.

• Allegations of fraudulent accounting practices have surfaced.

Concerns extend beyond market valuations to the financial reporting of major tech firms. According to the article, Burry has accused these firms of understating depreciation expenses by artificially extending the lifecycle of their chips, a practice he allegedly called "one of the more common frauds of the modern era."

How it may affect me

As a U.S. reader:

• Your investments in tech stocks or funds may experience volatility as firms like AMD see share prices fluctuate amid conflicting AI market predictions.

• Large-scale spending on AI chips by tech companies could eventually lead to more advanced AI-powered services, but the specific public impact remains speculative.

• Concerns about a potential "AI bubble" and allegations of fraud in the tech sector could create broader economic uncertainty, possibly affecting retirement and investment accounts.

AMD Shares Rise on Strong AI Chip Projections

The BareStory

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How it may affect me

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