advanced micro deviceCEO Lisa Su dismissed concerns about Big Tech’s soaring spending in an interview with CNBC’s “Squawk Box” on Wednesday, saying investing in more computing will accelerate the pace of innovation.
“I don’t think it’s a big gamble,” she said. “I think that’s the right bet.”
The stock price soared 10%.
Many of AMD’s hyperscaler customers have ramped up spending over the past 12 months as the technology reaches an “inflection point” and businesses can see a return on their spending, Su added.
Hsu’s comments come as tech giants announced more than $380 billion in AI investments in their latest earnings reports as they rush to build out infrastructure to handle surging demand.
Investors have largely shrugged off concerns about big companies spending more, but they have also punished companies outside the trillion-dollar club with similar guidance.
Su told analysts on Tuesday that AMD expects sales to grow 35% annually over the next three to five years due to “insatiable” demand for AI chips. He also said he expects the company to reach a “double-digit” share in the data center AI chip industry within the next three to five years.
Concerns about a looming AI bubble have rocked the market in recent trading, as investors have voiced concerns that valuations have become too high.
The move by major investors towards AI in the last few trades has not affected sentiment.
Last week, famous short-selling investor Michael Burley revealed his bet on the software maker. Palantir and Nvidia. This week, “Big Short” investors accused hyperscalers of underestimating depreciation costs by extending the lifecycle of their chips, calling it “one of the most common scams of our time.”
SoftBank announced Tuesday that it liquidated about $6 billion in Nvidia stock in October to support its AI investments, including a significant commitment to OpenAI.
Sources told CNBC that the sale was unrelated to AI valuation concerns.
Hsu told CNBC that he has “a lot of respect” for the Japanese conglomerate’s CEO, Masayoshi Son.
“The AI ecosystem is where people are making bets, and people are deciding what kind of bets they want to make and … what part of the stack they want to bet on,” Su said.
AMD’s 5-year stock price chart.
