Advanced Micro Devices has become the 13th U.S. public company to reach a $1 trillion market cap, with its stock up 190% in 2026 on surging demand for its AI chips. CEO Lisa Su has issued a bullish 2027 forecast for the data center business, but AMD's stretched valuation may keep a $2 trillion milestone out of reach for now.
Advanced Micro Devices has joined the $1 trillion club, becoming the 13th U.S. public company to cross that threshold. The chipmaker's stock has climbed 190% during 2026 through Sept. 25, driven by surging demand for its artificial intelligence chips. Yet AMD's stretched valuation means a $2 trillion market cap may be premature.
AI chip demand accelerates
AMD launched its first dedicated AI GPU, the MI300X, in 2023, and the chip attracted major customers including Microsoft and Oracle despite trailing Nvidia's H100 at the time. Its latest MI450 series GPU can be up to 15% more powerful and 30% more energy efficient than anything else on the market when paired with the company's Helios data center rack.
OpenAI and Meta Platforms plan to deploy six gigawatts of computing capacity using AMD's chips, starting with the MI450 GPUs and Helios racks. Anthropic and Microsoft also plan to adopt the same setup. The company is now developing its next-generation MI500 series, due to start shipping in 2027; Su recently told shareholders the chip could produce 2,000 times more performance than the original MI300X.
Data center revenue could double in 2027
The company's three business segments combined for $11.5 billion in revenue during the second quarter of 2026. The data center segment alone brought in a record $6.7 billion, a 107% increase from the year-ago period. Su believes data center sales will more than double again in 2027, and she has also predicted the data center chip market could reach $1.4 trillion by 2030, leaving AMD a long runway for growth.
A stretched valuation clouds the path to $2 trillion
The stock trades at a price-to-earnings ratio of 109 based on trailing-12-month adjusted earnings of $5.76 per share, almost quadruple Nvidia's P/E of 28.3. Wall Street's average estimate points to AMD earnings growing to $15.58 per share in 2027, which would put the stock at a forward P/E of 40.3 — still above Nvidia's current multiple. Fool contributor Anthony Di Pizio argues that gap makes it unrealistic to expect AMD stock to double over the next 18 months.
Source: The Motley Fool
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