Advanced Micro Devices (NASDAQ: AMD) is firing on all cylinders. The company’s shares have more than tripled over the past 12 months, driven by excellent financial results. Does the semiconductor specialist have any growth fuel left in the tank? There are good reasons to think so. For instance, recent comments from Nvidia‘s (NASDAQ: NVDA) CEO, Jensen Huang, suggest that demand for AMD’s products could be accelerating. Here’s what investors should know.

Four words with big implications

In the first quarter, AMD posted revenue growth of 38% year over year to $10.3 billion. The company credited strong demand for AI infrastructure for that performance. Specifically, AMD is a leader in the CPU (Central Processing Unit) market. Demand for CPUs could rise significantly as the AI industry shifts from training to inference (the phase in which models generate outputs).

CPUs are well-suited to run AI agents, and according to Huang, this phase of the AI boom is no longer in the future: It is here. His words couldn’t be clearer: “Agentic AI has arrived.” That’s great news for AMD, as it suggests that demand for the company’s EPYC processors could soar as companies race to unleash AI agents across every sector and industry.

Beware of the competition

Nvidia expects to tap into this growing market opportunity. That’s why the company launched its Vera CPU. Further, AMD still plays second fiddle to Intel in the CPU space, at least in terms of market share. Given these factors, can AMD capitalize on agentic AI enough to keep the party going and maintain excellent financial results and stock price performance? My view is that it can. Note that despite lagging Intel, AMD has made market share gains in recent years. In the first quarter, the company had a 33.2% share of the desktop CPU market, up 5% year over year. AMD’s revenue share was even higher, at 37.6% for the period, suggesting stronger pricing power than its competitor.

AMD’s high-performing EPYC processor and stronger manufacturing strategy have been instrumental in helping it gain ground on Intel. But will competition from Nvidia be AMD’s undoing? Probably not. The space ahead is vast enough to accommodate multiple winners. Nvidia expects the CPU landscape opened up by agentic AI to represent a massive $200 billion total addressable market. Let’s appreciate how big this opportunity is. It’s more than twice the combined revenue of AMD and Intel last year.