Advanced Micro Devices Inc.’s next target is artificial intelligence, just as it targeted the data-center market a few years ago.
At the chip maker’s analyst day on Thursday, AMD
Chief Executive Lisa Su said that AI is at an inflection point with technology from the company’s recent Xilinx acquisition.
“This is the single highest growth opportunity for us, the largest growth opportunity for us over the next few years,” Su told analysts.
A few years ago, Su said that data center was the place to lean in, and since then AMD has consistently and notably taken market share in central-processing units, or CPUs, from Intel Corp.
With the recent acquisition of Pensando, Su said that AMD now has leading technology in data processing units, or DPUs, chips specifically designed to process data on a large scale. Intel and Nvidia Corp.
are major suppliers of DPUs.
Su said AMD plans to be the “partner of choice in the data center over the next three to four years.”
“When I think about where we are today as a company: It’s such a different company than where we were a couple years ago,” Su said. That appears to echo what analysts were saying about AMD following its earnings report about a month ago. As recently as four years ago, Intel was more than 10 times the market cap of AMD, now they are evenly sized as far as market cap goes at around $160 billion.
Su also released details of the company’s financial model over the next three to four years. The company is predicting annual revenue growth of roughly 20% annualized, free cash flow margins of more than 25%, and gross margins of more than 57%.
That last one is significant seeing AMD just broke 50% gross margins a few quarters ago, while Intel has struggled to keep its gross margins higher than 50%.
AMD shares were roughly 1% higher in after-hours trading Thursday. The stock has fallen more than 30% so far this year, as the S&P 500 index
has declined 13.7%.