Key Takeaways
- BofA’s Vivek Arya increased his 2030 server CPU market forecast to $170 billion from $125 billion, positioning AMD as his preferred choice in the sector
- The Bank of America analyst boosted AMD’s price target to $560 from $500, pointing to the company’s strategic positioning and forthcoming “Venice” server chip generation
- Citi moved AMD to Buy from Neutral and elevated its price target to $575 from $460, arguing the market undervalues AMD’s GPU opportunity
- Citi projects AMD will capture most of Meta’s GPU orders, with the custom MI450 chips expected to scale up in the latter half of 2026, and anticipates $33 billion in AI revenue for AMD by 2027
- Shares of AMD finished Thursday’s session up approximately 8%, propelled by the consecutive positive analyst ratings
While Thursday seemed relatively calm across the technology sector, Advanced Micro Devices had other plans.
Shares of Advanced Micro Devices (AMD) jumped approximately 8% during Thursday’s trading session after two prominent Wall Street firms issued optimistic reports on the chipmaker within a short timeframe, driving the stock price to approximately $488.66.
Advanced Micro Devices, Inc., AMD
Bank of America’s Vivek Arya initiated the positive momentum early Thursday morning. He revised upward his projection for the server CPU market opportunity by 2030 to $170 billion, a substantial increase from his earlier $125 billion estimate. Arya designated AMD as his preferred investment choice within the CPU segment.
The analyst identified agentic AI applications as the primary catalyst behind this market expansion. His analysis projects a 37% compound annual growth trajectory for server CPUs spanning 2025 through 2030. This substantial growth forecast places AMD in a strategically advantageous position.
Accompanying this market outlook revision, Arya increased his price objective for AMD shares to $560 from $500, emphasizing the company’s strategic market position and the anticipated release of its “Venice” next-generation server processor lineup as critical factors supporting his recommendation.
Citi Follows With Bullish Stance
Shortly afterward, Citi reinforced the positive sentiment. Atif Malik, analyst at Citi, moved his rating on AMD to Buy from Neutral while increasing his price objective to $575 from $460.
Malik’s thesis centers on a valuation disconnect: Wall Street predominantly views AMD through a CPU lens. According to his analysis, the graphics processing unit opportunity remains inadequately reflected in the current valuation.
Citi’s research suggests AMD is positioned to secure the bulk of Meta‘s GPU requirements, with the tailored MI450 processors delivering Meta superior total cost of ownership compared to competing standard GPU offerings.
The firm referenced a previously disclosed partnership between AMD and Meta — a substantial six-gigawatt, four-year arrangement that includes a 160 million share common stock warrant. The initial one-gigawatt portion is projected to begin ramping during the second half of 2026 and extend into 2027.
Citi’s analysis suggests each gigawatt increment within this agreement represents approximately $15 billion in potential revenue for AMD.
Substantial AI Revenue Projections
Building on this partnership and broader GPU market traction, Citi now projects AMD’s AI-related revenue will reach $33 billion in 2027, representing 137% year-over-year growth, followed by $50.8 billion in 2028, marking a 54% increase.
These projections would establish AMD as a significantly more dominant GPU competitor than current market valuations suggest.
Regarding CPUs, Citi also adjusted its 2030 addressable market projection to $136.7 billion from $131.5 billion following the Computex conference. This reflects a 36% compound annual growth rate from the 2025 baseline of $29.3 billion.
Citi’s updated earnings per share estimates for the 2026-2028 period exceed Street consensus by 12% to 13%. The firm’s $575 price target derives from a sum-of-the-parts valuation methodology: $281 per share attributed to data center GPU operations, $204 per share for CPU business, supplemented by client, gaming, and embedded segment contributions, plus approximately $35 per share representing net cash position.
AMD’s 52-week trading range extends from $115.06 to $546.44. Thursday’s closing price of $488.66 positions the stock considerably above the range’s midpoint.
