<div id="readability-page-1"><div><div><h2>Key Points</h2><ul><li>AMD's technology stack is improving.</li><li>AMD's margins could expand to deliver outsized profit growth.</li><li>10 stocks we like better than Advanced Micro Devices ›</li></ul><p>Finding stocks that can increase in value 5 times within five years is a lofty goal. That requires serious stock performance, and few companies can deliver that. To achieve 5 times returns in five years, a company must grow at a 38% compounded annual growth rate (CAGR). A 38% CAGR isn't an easy return to achieve, and it requires a massive market opportunity.</p><p>What's a bigger opportunity than artificial intelligence (AI)? There are several names in this industry, including <strong>AMD</strong> <span>(NASDAQ: AMD)</span>. AMD has outperformed rival <strong>Nvidia</strong> in 2025, rising around 80% versus Nvidia's 35%. Furthermore, AMD gave an incredible growth projection set to come about over the next five years, so it's the perfect candidate to see if it could return 5 times in five years. Management's numbers line up with the 38% CAGR laid out above, giving AMD a real shot at delivering this incredible return.</p><figure><div><div><p><span><img src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/AEIg7cg5lZJQDEeDrlqXQg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY0MA--/https://media.zenfs.com/en/motleyfool.com/0bcb5bb5732b82f977b4de8acdb6a852?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="960" height="640" original-src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/AEIg7cg5lZJQDEeDrlqXQg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY0MA--/https://media.zenfs.com/en/motleyfool.com/0bcb5bb5732b82f977b4de8acdb6a852"/></span></p></div></div><p></p><figcaption>Image source: Getty Images.</figcaption><p></p></figure><h2>AMD's management is bullish on its five-year outlook</h2><p>Frankly, AMD has not done well in the AI revolution. Its hardware isn't as good as Nvidia's, and its software was well behind. However, AMD has made various acquisitions and partnerships to improve its controlling software, ROCm. It noted that downloads for ROCm were up 10 times year over year as of November 2025, so there is a possibility that AMD could start gaining some ground on Nvidia once AI clients realize that AMD's technology stack could compete with Nvidia's.</p><p>Nvidia has controlled the data center computing market with an iron fist, and this dominance shows up in each company's results. In Q3 2025, AMD's data center revenue rose 22% year over year to $4.3 billion. During Nvidia's Q3 FY 2026 (ending Oct. 26, 2025), its data center revenue totaled $51.2 billion, up 66% year over year. AMD is clearly getting smoked here, but the tides could be changing.</p><p>In Nvidia's release, they noted that they are &#34;sold out&#34; of cloud GPUs. This could be a concern for Nvidia, as clients will now likely search for alternative computing providers to fulfill their massive computing power needs. AMD could emerge as a top option to provide this power, and once they realize how far AMD's technology has come, they could become greater clients of AMD's because of its lower price point. That could increase AMD's business in the future, and so could a return to selling in the Chinese market.</p><p>Currently, neither AMD nor Nvidia is allowed to sell in China. However, they recently made a deal with the U.S. government to give up 15% of revenue for the right to export these GPUs to China. These GPUs aren't the cutting-edge ones used in the U.S. and are specifically downgraded to meet export restrictions. But if this sales channel returns, it could be a huge boost to AMD over the long run.</p><p>While these are positive catalysts, are they enough to provide the 38% CAGR necessary to return 5 times in five years?</p><h2>AMD's guidance is slightly lower than a 38% CAGR</h2><p>Over the next five years, AMD believes it can deliver a 60% CAGR in its data center division. That clears the 38% threshold by a wide margin, but that's not the only part of AMD's business. AMD also has a consumer hardware and embedded processor division, and each of those is expected to grow at a 10% CAGR over the next five years. That brings AMD's total CAGR to 35%, slightly less than the 38% needed.</p><p>However, revenue growth isn't the only thing the market looks at. If AMD can achieve outsized profit growth as well, it may be able to surpass the 38% CAGR in profit growth. After all, AMD's margins are far slimmer than Nvidia's.</p><figure><div><div><p><img src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/kmPzk4mNsIJbYSNU3vOjXA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY3Ng--/https://media.zenfs.com/en/motleyfool.com/4391f55a1fa181862c744a5f6dc42f76?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="507" original-src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/kmPzk4mNsIJbYSNU3vOjXA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY3Ng--/https://media.zenfs.com/en/motleyfool.com/4391f55a1fa181862c744a5f6dc42f76"/></p></div></div><p></p><figcaption>NVDA Profit Margin data by YCharts</figcaption><p></p></figure><p>If AMD can improve its profit margin to the 15% to 20% range, that will double the profits it generates from its revenue, providing another growth lever. If AMD can improve its margins and grow at the expected growth rate, I do not doubt that the stock could return 5 times in five years. If it does this, AMD will be a top stock to buy and hold.</p><h2>Should you buy stock in Advanced Micro Devices right now?</h2><p>Before you buy stock in Advanced Micro Devices, consider this:</p><p>The <em>Motley Fool Stock Advisor</em> analyst team just identified what they believe are the <strong>10 best stocks</strong> for investors to buy now… and Advanced Micro Devices wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.</p><p>Consider when <strong>Netflix</strong> made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, <strong>you’d have $504,994</strong>!* Or when <strong>Nvidia</strong> made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, <strong>you’d have $1,156,218</strong>!*</p><p>Now, it’s worth noting <em>Stock Advisor’s</em> total average return is 986<span>% — a market-crushing outperformance compared to 196% for the S&amp;P 500. <strong><span>Don't miss the latest top 10 list, available with <em>Stock Advisor</em>, and join an investing community built by individual investors for individual investors.</span></strong></span></p><p><strong>See the 10 stocks »</strong></p><p><em><em><span>*Stock Advisor returns as of December 22, 2025</span></em></em></p><p><em>Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.</em></p><p>Prediction: This Artificial Intelligence (AI) Stock Could 5X by 2030 was originally published by The Motley Fool</p></div></div></div>

NVDA

<p>AMD's management is optimistic about its data center future, projecting a 60% CAGR in this division over five years. Despite lagging behind Nvidia in AI, AMD's technology improvements and potential market opportunities, including a return to the Chinese market, could drive growth. While AMD's total CAGR is slightly below the 38% needed for a 5X return by 2030, improved profit margins could help achieve this target.</p>

- AMD's technology stack is improving, with management projecting potential for significant profit growth.  
- While AMD's total expected growth rate is slightly below the necessary 38% CAGR for fivefold returns, the company's data center division could exceed this threshold, and improving profit margins may enhance overall returns.  
- Despite these positive signs, the Motley Fool's latest recommendations do not include AMD, suggesting caution for prospective investors.