AMD is set to report strong fourth-quarter results, with revenue expected to rise over 22% to$7.53 billion. However, competition in the AI chip market is intensifying, as Nvidia maintains its dominance and major tech firms such as Microsoft, Amazon, and Meta develop custom silicon. Analysts warn that the shift towards in-house AI processors could limit AMD's growth in the long term.

The rise of Chinese AI startup DeepSeek has also raised concerns, as its models reportedly rival Western alternatives at a lower cost. Demand for AI chips remains high, but supply constraints continue to pose challenges. While contract manufacturer TSMC is working to expand capacity, Nvidia's ramp-up of its latest Blackwell AI chips may restrict AMD's access to manufacturing resources.

Despite these pressures, AMD's AI chip sales could reach$10 billion in 2024, double the company's initial forecast. The data centre chip segment is expected to see significant growth, contributing over half of total revenue. Meanwhile, AMD's personal computer unit is expanding, with sales set to rise nearly 33% as the company gains market share from Intel.