AMD shares jump 9% on CEO's forecast for AI, data center growth

Advanced Micro Devices CEO Lisa Su said she is not concerned about Big Tech’s rising spending on AI, calling it an appropriate investment during a CNBC interview on Wednesday.

Shares of AMD rose 9% following her comments.

Su said that hyperscaler clients have increased spending as AI technology reaches a turning point, adding that companies are starting to see the benefits of these investments.

She told analysts that AMD expects revenues to grow 35% per year over the next three to five years, driven by strong AI chip demand.

Su also projected that AMD could capture a double-digit share of the data center AI chip market in the same period.

Major tech firms have reported over US$380 billion in AI-related spending in recent earnings.

🔗 Source: CNBC

🧠 Food for thought

Implications, context, and why it matters.

AMD’s double-digit AI share forecast depends on scarce advanced packaging capacity

AMD expects 35% yearly revenue growth and a double digit AI chip share over 3 to 5 years. That hinges on access to Taiwan Semiconductor Manufacturing Company (TSMC) advanced packaging (specialized assembly that links multiple chips into one module), which is tight 1. Limited packaging could cap output even with strong designs.
With TSMC capacity largely tied to NVIDIA, U.S. chip designers use Powertech Technology Inc. (a contract semiconductor packaging and testing firm), and its slots for next year are mostly reserved 1.
By 2026, Morgan Stanley pegs TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) capacity at about 93,000 wafers per month, up roughly 33% 2. It sees NVIDIA near 66% of demand, Broadcom at 13%, and AMD at 7% 2.

Liquid cooling vendors stand to gain from AI rack density surge

Next generation NVIDIA based GPU servers may draw up to 240 kW per rack, up from about 12 kW in 2024, so air cooling often falls short 3.
Equinix plans liquid cooling in 100 data centers across 45 cities, while Digital Realty (a colocation provider where customers deploy their own hardware) launched a liquid cooled option that supports up to 70 kW per rack 4.
Vendors of direct to chip systems (coolant flows over hot components), rear door heat exchangers (radiator like units on the back of racks), and immersion cooling (servers in non conductive fluid) now face strong demand.