TLDR
- Bank of America increased server CPU market projection from $110B to $125B through 2030
- Nvidia and AMD identified as BofA’s preferred AI chip stock selections
- Server CPUs emerging as critical “control plane” for agentic AI inference operations
- Custom ARM-based processors from major cloud providers projected as fastest-expanding segment
- Nvidia delivered Q1 FY2027 revenue of $81.6B, representing 85% annual growth
Bank of America has elevated its projection for the server CPU market to $125 billion by decade’s end, increasing from its previous $110 billion estimate, while designating AMD and Nvidia as its top semiconductor stock choices positioned to capitalize on this transformation.
This revised forecast stems from the emergence of agentic AI — intelligent systems capable of planning operations, retrieving information, managing memory resources, and executing complex multi-stage processes. According to BofA analyst Vivek Arya, ranked 94th among over 12,000 analysts monitored by TipRanks, these advanced AI architectures require greater CPU involvement than earlier iterations.
The financial institution anticipates a 31% compound annual growth rate for the server CPU sector from 2026 through 2030, building from an approximate $43 billion foundation.
The Growing Significance of CPUs in Artificial Intelligence
Throughout the initial AI surge, graphics processing units dominated model training workloads. However, as artificial intelligence architectures grow increasingly sophisticated, central processing units are being tasked with coordinating operations, maintaining state information, and interfacing with storage and retrieval infrastructure.
Bank of America characterizes CPUs as the “control plane” for AI inference, indicating they manage the coordination framework essential for agentic AI functionality.
The institution emphasizes this development complements rather than replaces GPU requirements. Instead, it signals an overall expansion of data center infrastructure. Dedicated CPU-only server configurations are anticipated to address workloads that GPU-based systems cannot economically support.
Nvidia and AMD Top BofA’s Investment Recommendations
BofA sustains a Buy rating on both companies, establishing a $500 price objective for AMD.
AMD is projected to command approximately 28% of server CPU market value by 2030, with anticipated expansion across both cloud infrastructure and enterprise deployments. Nvidia earns recognition for its capability to integrate CPUs, GPUs, networking components, and memory into comprehensive AI platforms.
Nvidia’s forthcoming Vera CPU, scheduled for introduction with its Vera Rubin platform during the latter half of 2026, is anticipated to operate in tandem with GPUs at nearly equal ratios within next-generation AI server configurations.
ARM-architecture custom processors, encompassing AWS Graviton, Google Axion, and Microsoft Cobalt, are predicted to constitute the most rapidly expanding category, climbing from approximately 15% of current server CPU market value to roughly 37% by 2030. Intel faces projected market share erosion in both cloud and enterprise sectors.
Nvidia’s latest financial results substantiate the CPU momentum. The corporation posted Q1 Fiscal 2027 adjusted earnings per share of $1.87, surpassing Wall Street’s $1.75 consensus. Revenue reached $81.6 billion, marking an 85% year-over-year increase.
Despite robust expansion projections, server CPUs are still forecast to comprise merely 5 to 6% of aggregate data center expenditure by 2030. AI accelerators are expected to maintain dominance within the broader AI data center ecosystem that BofA values at $1.7 trillion.
