Gaming is one of the biggest industries in tech and has seen unprecedented growth over the last decade. Given its hand in computer CPU (Central Processing Unit) and GPU (Graphics Processing Unit) manufacturing, many anticipated gaming to be Advanced Micro Devices’ (AMD) biggest growth story. Things, however, have changed in the last few years. AMD stock’s biggest growth factor is not gaming anymore, but enterprise AI. Let’s discuss.

How Enterprise AI Can Become AMD Stock’s Biggest Growth Factor

The world undergone a shift after the coming of AI. While gaming still remains a cornerstone for AMD’s business, AI data centers have quickly taken the top priority. The company is pivoting from only offering AI-centric GPUs, towards a more holistic approach. AMD is aiming to create CPUs, AI accelerators, networking, and software into integrated systems designed for enterprise customers.

AMD is also in a unique position of offering both GPU and CPU solutions. While generative AI is more GPU-focussed, agentic AI will demand more from CPU power. The coming of agentic AI could propel AMD stock into a new growth phase. Intel CEO Lip-Bu Tan also reiterated a similar sentiment about CPU-centric agentic AI.

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With its entry into data centers and AI computing power, AMD’s business has exposure to gaming, personal computers, embedded systems, data centers, and enterprise AI. This gives the company significant diversification.

Positive Price Action

AMD stock price closed 6.61% (34.23 points) higher after Goldman Sachs raised its price target to $640.

Wall Street analysts are becoming increasingly bullish on AMD, especially amid the ongoing AI boom. Some analysts, however, remain skeptical. Micheal Burry is one such expert, who claims we are in an AI bubble which is nearing its end. Given AMD’s diverse business strategy, the company could very well navigate a potential bubble explosion.