Key Points
AMD is targeting adjusted earnings per share of over $20 within three to five years of its November 2025 analyst day.
CEO Lisa Su said in August that AMD expects to significantly exceed that target.
Warrants AMD gave to OpenAI and Meta might add up to 320 million shares to its share count.
Shares of Advanced Micro Devices (NASDAQ:AMD) have dropped since hitting a record closing high of $649.42 on Oct. 6. As I write, the company's stock is above $550, or roughly 15% below its peak. Third-quarter results are due after the close on Tuesday, Nov. 3.
Where the stock ends 2030, though, depends less on the report than on how much AMD earns a share by then and what investors will pay for those earnings.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Going by AMD's own long-term earnings target, I think the stock ends 2030 somewhere between $600 and $750 a share.
That's a return of around 2% to 8% a year from here. It's decent. But it's a far cry from the past 52 weeks, when the stock more than tripled from a low of around $188 to its October record.
Image source: AMD.
A $20 earnings target
At its November 2025 financial analyst day, AMD set targets for the next three to five years, including yearly revenue growth over 35% and earnings per share above $20 on a non-GAAP (adjusted) basis. Five years after the event falls in late 2030.
Showing how big a leap that is, AMD's adjusted earnings per share came to $4.17 in 2025, a 26% gain over 2024. Quarterly earnings have grown since, but not in a straight line. Adjusted earnings per share went from $1.20 in Q3 2025 to $1.53 in Q4, slipped to $1.37 in Q1 2026, and then hit a record $1.66 in Q2.
Even that record quarter annualizes to under $7 a share. In other words, the target asks AMD to about triple its current earnings pace.
Management, though, thinks AMD can do better than that.
"[W]e expect to significantly exceed our $20 annual EPS target within our strategic time frame," CEO Lisa Su said on the company's Aug. 4 earnings call.
Helios, AMD's rack-scale artificial intelligence (AI) system, is a big part of that confidence, and management said in August that first shipments would start in the second half of 2026. And besides its gigawatt-scale deals with OpenAI and Meta Platforms (NASDAQ:META), AMD has also signed up Anthropic, which plans to deploy up to 2 gigawatts of AMD's MI450 series graphics processing units (GPUs) in Helios racks.
The warrants make $20 harder to reach
Under its 6-gigawatt deals with OpenAI and Meta, AMD gave each a warrant to buy up to 160 million AMD shares at a cent apiece. Tranches vest as each customer's GPU purchases meet milestones and as AMD's stock price tops set levels. As of June 27, none had vested.
AMD expects around 1.66 billion diluted shares for the third quarter. At $20 a share, that number means around $33 billion in yearly adjusted profit. Spread over about 1.98 billion shares, with all 320 million warrant shares added, the same profit is just around $17 a share.
Sure, every warrant share vests only if both customers buy their full 6 gigawatts. That's also the case where AMD's profit will probably be largest.
So I assume AMD earns $20 to $25 a share in 2030 with the larger share count. The low end takes the target at face value with every warrant share counted, and the high end gives Su's "significantly exceed" some room. Getting there takes yearly adjusted profit of about $40 billion to $50 billion -- roughly four times the second quarter's pace, when adjusted net income climbed 22% sequentially to about $2.8 billion.
What will investors pay for it?
Today's price is around 35 times expected 2027 earnings, based on analysts' consensus estimate. By the end of 2030, AMD should be a far bigger company growing at a slower rate. So I'd pick a price-to-earnings ratio of around 30 for 2030, a small drop from today's level.
At 30 times earnings, $20 to $25 per share means a stock price of $600 to $750 by the close of 2030.
Sure, the range could be too low. Su also said AMD now expects revenue to rise much faster than its previous target of over 35% a year. But chip demand has been cyclical for decades, and a slowdown in AI spending before 2030 could hurt both AMD's earnings and the price-to-earnings ratio investors are willing to pay. At 25 times earnings, the low end of my range drops to $500, under today's price.
Overall, I think AMD's plan is credible. It has more big Helios customers lined up than it had a year ago, and its earnings are rising. But the stock's price today arguably already reflects much of what AMD expects to earn by 2030.
I think the stock is still worth owning as a small position. I just wouldn't count on much more than single-digit yearly returns from here.
Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy.