The share prices of Advanced Micro Devices (NASDAQ: AMD) have reached new highs this year, driven by a 386% increase in free cash flow since 2023. With strong demand for high-end chips used in AI applications, AMD is poised for significant growth in the data center chip market, potentially sending the stock soaring.

AMD reported a 36% year-over-year revenue growth in the third quarter and is set to launch its MI400 series of data center chips next year. Partnerships with companies like OpenAI could generate over $100 billion in revenue, contributing to AMD’s projected surge in free cash flow to nearly $23 billion by 2029.

Analysts project a $1 trillion addressable market for AMD, with stock potentially reaching over $500 in the next five years. With shares trading at just 17 times 2029 free cash flow estimates, investing in Advanced Micro Devices now could offer substantial returns. Consider the 10 best stocks identified by The Motley Fool Stock Advisor for potentially high returns.

Read more at Nasdaq: Prediction: Advanced Micro Devices Stock Will Soar Over the Next 5 Years. Here’s 1 Reason Why.