Finding stocks that can increase in value 5 times within five years is a lofty goal. That requires serious stock performance, and few companies can deliver that. To achieve 5 times returns in five years, a company must grow at a 38% compounded annual growth rate (CAGR). A 38% CAGR isn't an easy return to achieve, and it requires a massive market opportunity.
What's a bigger opportunity than artificial intelligence (AI)? There are several names in this industry, including AMD (AMD 3.47%). AMD has outperformed rival Nvidia in 2025, rising around 80% versus Nvidia's 35%. Furthermore, AMD gave an incredible growth projection set to come about over the next five years, so it's the perfect candidate to see if it could return 5 times in five years. Management's numbers line up with the 38% CAGR laid out above, giving AMD a real shot at delivering this incredible return.
Image source: Getty Images.
AMD's management is bullish on its five-year outlook
Frankly, AMD has not done well in the AI revolution. Its hardware isn't as good as Nvidia's, and its software was well behind. However, AMD has made various acquisitions and partnerships to improve its controlling software, ROCm. It noted that downloads for ROCm were up 10 times year over year as of November 2025, so there is a possibility that AMD could start gaining some ground on Nvidia once AI clients realize that AMD's technology stack could compete with Nvidia's.
Nvidia has controlled the data center computing market with an iron fist, and this dominance shows up in each company's results. In Q3 2025, AMD's data center revenue rose 22% year over year to $4.3 billion. During Nvidia's Q3 FY 2026 (ending Oct. 26, 2025), its data center revenue totaled $51.2 billion, up 66% year over year. AMD is clearly getting smoked here, but the tides could be changing.
NASDAQ: AMD
Key Data Points
In Nvidia's release, they noted that they are "sold out" of cloud GPUs. This could be a concern for Nvidia, as clients will now likely search for alternative computing providers to fulfill their massive computing power needs. AMD could emerge as a top option to provide this power, and once they realize how far AMD's technology has come, they could become greater clients of AMD's because of its lower price point. That could increase AMD's business in the future, and so could a return to selling in the Chinese market.
Currently, neither AMD nor Nvidia is allowed to sell in China. However, they recently made a deal with the U.S. government to give up 15% of revenue for the right to export these GPUs to China. These GPUs aren't the cutting-edge ones used in the U.S. and are specifically downgraded to meet export restrictions. But if this sales channel returns, it could be a huge boost to AMD over the long run.
While these are positive catalysts, are they enough to provide the 38% CAGR necessary to return 5 times in five years?
AMD's guidance is slightly lower than a 38% CAGR
Over the next five years, AMD believes it can deliver a 60% CAGR in its data center division. That clears the 38% threshold by a wide margin, but that's not the only part of AMD's business. AMD also has a consumer hardware and embedded processor division, and each of those is expected to grow at a 10% CAGR over the next five years. That brings AMD's total CAGR to 35%, slightly less than the 38% needed.
However, revenue growth isn't the only thing the market looks at. If AMD can achieve outsized profit growth as well, it may be able to surpass the 38% CAGR in profit growth. After all, AMD's margins are far slimmer than Nvidia's.
NVDA Profit Margin data by YCharts
If AMD can improve its profit margin to the 15% to 20% range, that will double the profits it generates from its revenue, providing another growth lever. If AMD can improve its margins and grow at the expected growth rate, I do not doubt that the stock could return 5 times in five years. If it does this, AMD will be a top stock to buy and hold.
