Key Takeaways
- Bank of America’s Vivek Arya increased his 2030 server CPU addressable market projection to $170 billion from $125 billion, designating AMD as his preferred pick in the segment
- Arya boosted AMD’s price target from $500 to $560, emphasizing the company’s strategic positioning and the forthcoming “Venice” server processor lineup
- Citi shifted AMD to Buy from Neutral, increasing its target from $460 to $575, asserting that the market undervalues AMD’s GPU capabilities
- Citi projects AMD will capture a dominant share of GPU contracts with Meta through custom MI450 processors launching in late 2026, with AI revenue hitting $33 billion by 2027
- Shares of AMD finished Thursday’s session up approximately 8%, propelled by consecutive positive analyst reports
While Thursday appeared 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 after a pair of prominent Wall Street institutions released optimistic assessments of the semiconductor company within hours, driving the stock toward $488.66.
Advanced Micro Devices, Inc., AMD
Bank of America’s Vivek Arya initiated the bullish wave early Thursday morning. He significantly expanded his projection for the server CPU addressable market in 2030 to $170 billion, a substantial leap from his previous $125 billion forecast. Arya designated AMD as his leading choice within the CPU sector.
Arya identified agentic artificial intelligence as the primary catalyst behind his enhanced outlook. His analysis anticipates a 37% compound annual growth rate for server CPUs spanning 2025 through 2030. That substantial growth trajectory positions AMD at the center of this expanding opportunity.
Accompanying this revised outlook, Arya elevated his AMD price objective from $500 to $560, highlighting the company’s strategic market positioning and the anticipated rollout of its “Venice” next-generation server chips as primary factors supporting his recommendation.
Citi Reinforces Bullish Sentiment With Separate Upgrade
Shortly after, Citi contributed additional upward momentum. Analyst Atif Malik elevated AMD from Neutral to Buy while increasing his price objective from $460 to $575.
Malik’s thesis centers on a straightforward premise: Wall Street continues viewing AMD predominantly through a CPU lens. According to his analysis, the graphics processing unit opportunity remains largely unrecognized in current valuations.
Citi anticipates AMD securing the bulk of GPU contracts from Meta, leveraging custom MI450 processors that deliver superior total ownership economics compared to competing merchant GPU solutions.
The firm referenced a previously disclosed arrangement between AMD and Meta — a six-gigawatt commitment spanning four years, structured with a 160 million share common stock warrant. Initial deployment of the first one-gigawatt phase is scheduled for the latter half of 2026, extending into 2027.
Citi calculates that each gigawatt under this agreement represents approximately $15 billion in AMD revenue.
Substantial AI Revenue Projections
Building on this Meta partnership and broader GPU expansion, Citi now anticipates AMD’s AI-related revenue reaching $33 billion in 2027, representing 137% year-over-year growth, followed by $50.8 billion in 2028, a 54% increase.
These projections would establish AMD as a significantly more prominent GPU competitor than current market pricing suggests.
Regarding the CPU segment, Citi also revised its 2030 addressable market estimate upward to $136.7 billion from $131.5 billion following industry events at Computex. This represents a 36% compound annual growth rate from $29.3 billion in 2025.
Citi’s updated 2026-2028 earnings per share projections exceed Street consensus by 12% to 13%. The firm’s $575 target derives from a sum-of-the-parts valuation: $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 in 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 comfortably above the range’s midpoint.
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