AMD projects AI data center revenue to more than double by 2027, yet shares fell despite a 70% surge in Q2 CPU sales.
Advanced Micro Devices (NASDAQ: AMD) reported a 70% increase in data center CPU revenue for Q2, driven by strong demand in AI inference and agentic AI applications. The company expects server CPU growth to exceed 80% year over year in the second half of 2024 and over 70% in 2027, as the AI market opportunity expands to $220 billion in the coming years.
Despite the growth, AMD’s stock declined, though it remains up roughly 125% for the year. The company’s GPUs have also gained traction in the inference market, complementing its long-standing leadership in data center CPUs, where it continues to take share from competitors like Intel.
AMD’s outlook highlights a shift from AI training to inference and agentic AI, which require significantly more CPUs, altering the GPU-to-CPU ratio from 8-to-1 for training to as low as 1-to-1 for agentic AI.