Advanced Micro Devices (AMD 0.67%) may not be the star of the artificial intelligence (AI) revolution so far, but there's no doubt that the chipmaker is taking part in the surge.
Shares of AMD have soared since the launch of ChatGPT in November 2022, and excitement around AMD's recent launch of AI GPU Mi300 could propel the stock higher.
However, a soaring stock price is nothing new for AMD, as shares have jumped 484% in the last five years.
Image source: Getty Images.
Why AMD stock has skyrocketed
AMD stock has been propelled higher in the last five years by two separate booms in the semiconductor sector. The first one came during the early days of the pandemic as demand for all things tech, including PCs and tablets, soared, and AMD's revenue was nearly doubling at one point in 2021.
After the stock pulled back in 2022 amid a broader crash in tech stocks and a hangover in tech demand, shares have rallied on hopes for an AI-fueled boom.
AMD has yet to benefit from soaring demand for GPUs to run the kinds of high-intensity models that make ChatGPT work, and revenue growth has been weak over the last few quarters, but investors expect that to change.
The company still expects modest growth in the current quarter, but that's due in part to weakness in the gaming and embedded segments. Investors will be watching demand for the Mi300 closely.
NASDAQ: AMD
Key Data Points
What $10,000 turned into in five years
Based on the share price growth of 484%, $10,000 invested in AMD five years ago would have turned into $58,400. That's much better than the result from the S&P 500, which nearly doubled in the time frame.
While AMD stock isn't guaranteed to continue to outperform, its track record is encouraging. Ultimately, the company's success in AI will determine the stock performance over at least the next few years.
