Data Center to Dominate AMD Growth

Advanced Micro Devices’ (NASDAQ: AMD) Data Center division is projected to experience significant growth, driven by demand for the company’s EPYC processors and Instinct GPUs. In 2023, Data Center contributed to 29% of the company’s total net revenue. Based on Visible Alpha consensus estimates, this share is expected to increase to 47% by 2024, and to 63% by 2028. Between 2024 and 2028, Data Center revenue is estimated to grow at a CAGR of 29%. This is compared to a CAGR growth of 10% for Client, 5% for Gaming, and 12% for the Embedded segment.

In Q4 2023, AMD saw substantial growth in its Data Center (+38% YoY) and Client (+62% YoY) divisions. However, this growth was offset by a fall in revenue from the Embedded (-24% YoY) and Gaming (-17% YoY) segments. For the upcoming Q1 2024, analysts expect the Data Center and Client segments to sustain robust growth rates of +79% and +74% year over year, respectively. Conversely, the Gaming and Embedded segments are estimated to experience revenue declines of -46% and -41% year over year.

For the full year, analysts expect a rebound in total net revenues for AMD, transitioning from -4% year over year in 2023 to a +14% increase in 2024, and a +28% rise in 2025. AMD is set to announce its first-quarter 2024 results on Tuesday, April 30th.