Advanced Micro Devices‘ CEO Lisa Su shut down concerns over Big Tech’s elevated spending during an interview with CNBC’s “Squawk Box” on Wednesday and said investing in more computing will accelerate the pace of innovation.
“I don’t think it’s a big gamble,” she said. “I think it’s the right gamble.”
Shares soared 10%.
Many of AMD’s hyperscaler customers over the last 12 months have beefed up spending as the technology reaches an “inflection point” and companies can see the return on that spending, Su added.
Su’s comments come as tech’s megacaps announced more than $380 billion in AI spending in their latest earnings reports as the firms race to build out infrastructure to support soaring demand.
Investors have mostly brushed off concerns of higher spending among the behemoths, while punishing businesses outside the $1 trillion club offering similar guidance.
On Tuesday, Su told analysts that AMD expects revenues to grow 35% per year over the next three to five years due to “insatiable” AI chip demand. She also said the company expects to reach “double-digit” share of the data center AI chip industry within the next three to five years.
Concerns of a looming AI bubble have jolted markets in recent sessions as investors raise concerns that valuations have gotten too high.
AI moves from major investors over the last few trading sessions haven’t helped sentiment.
Last week, famed short-seller Michael Burry revealed bets against software maker Palantir and Nvidia. This week, “The Big Short” investor accused hyperscalers of understating depreciation expenses by extending the life cycle of chips, which he called “one of the more common frauds of the modern era.”
Softbank said Tuesday that it dissolved its nearly $6 billion stake in Nvidia in October to support its AI bets, which include a substantial commitment to OpenAI.
A person familiar with the matter told CNBC that the sale was not related to AI valuation concerns.
Su told CNBC she has “a lot of respect” for Masayoshi Son, CEO of the Japanese conglomerate.
“The AI ecosystem is in a place where people are making bets, and people are deciding what bets they want to make, and … which part of the stack you want to make the bets,” Su said.
AMD 5-year stock chart.
