15 Best Growth Stocks to Buy for the Next 5 Years

6. Advanced Micro Devices Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 107

5-Year Revenue CAGR: 32.17%

Upside Potential as of January 15: 53.37%

Advanced Micro Devices Inc. (NASDAQ:AMD) is a semiconductor company that specializes in high-performance computing and graphics solutions. Its product portfolio includes CPUs, GPUs, FPGAs, and adaptive SoCs, and serves diverse industries like data centers, gaming, and embedded systems.

Northland Capital has recently issued an Outperform rating for the company, setting a $175 price target. This outlook is driven by anticipated market share gains across key segments: AI GPUs, server CPUs, and personal computers. The firm projects a surge in AI revenue, from $5.2 billion in 2024 to $9.5 billion in 2025, while non-AI data center revenue is estimated at $8.5 billion. This growth trajectory is fueled by the demand for high-performance hardware to support advanced machine-learning models.

It reported record Q3 2024 revenue of $6.8 billion, driven by a 122% surge in Data Center revenue to $3.5 billion. This was driven by EPYC CPUs and Instinct GPUs, crucial for powering AI workloads, including training LLMs and running complex ML inference tasks. EPYC CPUs are powering critical services for major tech companies like Microsoft, Meta, Google, and AWS. As AI applications continue to proliferate, the demand for high-performance computing solutions is poised to accelerate further, driving continued growth for Advanced Micro Devices Inc. (NASDAQ:AMD).