TMTPOST --   Advanced Micro Devices,   Inc.   ( AMD )   shares   jumped 9%   on Wednesday, leading the   broader U.S. market   index   S&P 500   as Wall Street applauds   the outlook of the chipmaker   unveiled   on   its analyst   day.

Credit：AMD

AMD   at its Financial Analyst Day   on Tuesday   showcased   its long-term strategy   to lead the $1 trillion compute market and   accelerate   next phase   of growth. At   the event,   AMD   CEO   Lisa Su said the company sees the datacenter total addressable market ( TAM )   reaching $1 trillion by 2030.   That means AMD   doubled   its outlook for   the datacenter TAM, including central processing units ( CPUs ) , artificial intelligence ( AI ) chips and networking products.

"AMD is entering a new era of growth fueled by our leadership technology roadmaps and accelerating AI momentum," said Su. "With the broadest portfolio of products and our deepening strategic partnerships, AMD is uniquely positioned to lead the next generation of high-performance and AI computing. We see a tremendous opportunity ahead to deliver sustainable, industry-leading growth. We have never been better positioned."

AMD outlined   its growth targets   for   the next three to five years. It projected total   revenue growing   at a   more than 35%   compound annual growth rate ( CAGR ) , a non-GAAP operating margin greater than 35%, a   gross   margin to between 55%   and 58%,   and non-GAAP earnings per share   ( EPS )   exceeding $20.  

For the   datacenter business, the main   beneficiary of AI   spending, AMD   anticipated   deliver a greater than 60% revenue CAGR. In data center AI, AMD aims to drive revenue CAGR of more than 80%, powered by strong customer momentum and next-generation AMD Instinct products and systems.   Su said the company's data center business is on track to make tens of billions of dollars of revenue in 2027 and   is   expected   to grab a "double-digit"   share of the AI data center market   within the next three to five   years, directly challenging   the market leader   Nvidia   Corp.

Su revealed   that the firm is seeing strong momentum with multiple gigawatt-scale project opportunities for its MI450 series chips and Helios rack-scale offerings across hyperscalers, AI-native companies, and sovereign AI businesses.   While AMD   disclosed   development of its next-generation MI500 series chips is underway,few details   about their specifications   ofr release timeline   were   provided.

In the server chip market, AMD is targeting its share of the market to pass 50%,   up from   about   40%   currently, driven by   its EPYC processos. For client chips, the company said it is aiming for more than 40% of the market.  

Su   dismissed concerns over Big Tech ’ s elevated spending during a   CNBC interview   on Wednesday,   stating investing in more computing will accelerate the pace of innovation.   "I don ’ t think it ’ s a big gamble," she said. "I think it ’ s the right gamble."

"Overall, we are very pleased with the presented roadmap, and are optimistic on the company ’ s outlook," said Harsh Kumar, senior analyst at Piper Sandler, in a note to clients.   Though   While AMD didn't share as many incremental details on its AI GPU road map as some analysts were hoping, Jefferies's senior analyst   Blayne Curtis said in a Tuesday note that "success of the business from here remains largely dependent on how the market receives MI400/MI500 series GPUs."

While AMD's expectations for its business are "mostly consistent" with what Wall Street already modeled for the near to medium term, according to Bernstein's senior   analyst Stacy Rasgon, "the real story still hinges on the company's ability to leverage" its first rack-scale solution, Helios, into something that positions AMD as a larger and more formidable player in the AI market in the coming years.

AMD   last week released   stronger-than-anticipated top   and bottom line   for the third quarter, but its   guidance   failed   to impress Wall   Street.

Sales for   the   quarter ended   in   September rose 36% year-over-year ( YoY )   to $9.25 billion,   beating   analysts   estimated $8.7 billion.   EPS   stood   at $1.20,   minus   certain items, whereas analysts projected $1.17.   AMD ’ s datacenter business   generating $4.3 billion   that quarter   with a 22%   YoY rise,   compared with estimates of $4.14 billion.   AMD saw revenue of roughly $9.6   billion   for   the fourth quarter.   While analysts had predicted   $9.2 billion   on average,   some   projections   ranged as   high   as $9.9 billion.