AMD's 60% Data Center Growth Claim Faces High Execution Bar

What happened

On February 23, 2026, The Motley Fool reported that AMD management projects a long-term 60% growth rate for its data center segment, citing accelerating growth. This optimism contrasts with the DeepValue report's assessment that AMD's stock, trading at $205.94 with a 77.4x P/E, has no margin of safety and is priced for perfect execution of the MI450 GPU ramp starting in Q3 2026. The report highlights that AMD's revenue lacks contractual visibility, with customers able to cancel orders, and is exposed to export-control-driven inventory charges, as seen in 2025 with $440M net charges. Key milestones, such as Oracle's 50,000 MI450-GPU supercluster and OpenAI's 1GW deployment, must materialize on schedule to validate the growth narrative, but delays are possible due to customer capacity constraints. Consequently, management's growth projection, while positive, does not change the investment imperative to wait for tangible proof points or a lower entry price below $170.

Implication

The management's 60% growth claim reinforces the bullish narrative but overlooks critical vulnerabilities. AMD's valuation assumes flawless timing of MI450 deployments, which are exposed to supply chain and regulatory shocks. With $8.5B in commitments for 2026 and weak order cancellability, any slip could trigger significant write-downs. Export control dynamics could reintroduce margin volatility, as evidenced by past inventory charges. Therefore, the prudent approach is to monitor the Oracle and OpenAI milestones in Q3 and 2H 2026 before considering an investment.

Thesis delta

The news does not alter the fundamental thesis that AMD's stock is overvalued relative to execution risks. It merely reiterates management's optimistic outlook, which is already embedded in the market's expectations. Thus, the recommendation remains to wait for concrete evidence of the MI450 ramp or a price correction to $170.