BofA Securities raised its price target on Advanced Micro Devices to $720 from $620, keeping a Buy rating and naming the chipmaker its top CPU pick. The firm projects the server CPU market tripling from $61 billion in 2026 to $211 billion by 2030, with $180 billion of that driven by AI workloads.
Advanced Micro Devices became the latest chipmaker to cross a $1 trillion market cap this week, and BofA Securities analyst Vivek Arya sees further room to run. He lifted his price target to $720 from $620 on Friday, reiterating a Buy rating and calling AMD the firm's top CPU pick.
Server CPU demand set to triple
BofA projects the server CPU total addressable market will nearly triple, from $61 billion in 2026 to $211 billion by 2030, with $180 billion of that growth tied to AI workloads. AMD is, in BofA's view, the most direct way to bet on that expansion given its x86 server CPU lineup and growing share in AI-optimized data center setups.
The new target rests on 30 times BofA's CY2028 earnings estimate, up from a 27 times multiple previously, reflecting higher CPU average selling prices tied to an agentic workload mix. The firm also raised its CY2027 and CY2028 AMD EPS estimates by 2-3% on the same basis.
Agentic AI reframes the CPU's role
BofA frames agentic AI, where software agents autonomously execute multi-step tasks, as a structural demand driver for CPUs rather than just GPUs. According to BofA: "Agentic AI requires compute across the system", Arya wrote following a hosted investor call with Ben Bajarin, CEO and principal analyst at Creative Strategies.
The firm models AI CPU units nearly tripling from 16 million in CY2026 to 53 million in CY2030, reaching roughly 1.5 times accelerator unit volumes by then, versus about 0.7 times today. Blended server CPU average selling prices, the firm estimates, climb from approximately $1,600 in 2026 to approximately $2,600 in 2030. Bajarin, as cited by BofA, suggested high-end AI CPU package values could reach $4,000-$5,000 or more for NVIDIA's Vera CPU.
x86 holds legacy ground, ARM eyes new workloads
BofA expects x86 to stay entrenched in legacy cloud and enterprise software, while ARM is best positioned for greenfield AI workloads. Bajarin projected ARM-based server CPU unit share approaching 40% by decade-end, potentially reaching 50% if hyperscaler porting accelerates. He also pointed to an approximately $80 billion on-premises enterprise CPU opportunity that BofA views as incremental to the cloud-driven TAM.
The firm simultaneously reiterated Buy ratings on Nvidia and Intel, citing Nvidia's broad portfolio and CPU/GPU fungibility, and Intel's potential to supply incremental CPU foundry capacity to external customers. The firm pointed to the Anthropic/Akamai CPU infrastructure deal and Meta's Muse product as real-world signals of the CPU's expanding role in AI systems, though it cautioned that Meta's CPU-heavy setup may not reflect GPU-heavy operators broadly.
Shares of AMD were up 0.6% to $632.99 in early trading, up over 13% this week.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
