Key Takeaways
- New research from Wolfe predicts the CPU market will expand approximately 30% by 2028, fueled by agentic and orchestration processing demands
- Advanced Micro Devices identified as the primary beneficiary when accounting for company scale and current market valuation, with server CPU revenues projected at $44 billion by 2028
- ARM architecture anticipated to dominate 50–75% of the agentic CPU segment
- Intel projected to experience continuing market share erosion in orchestration and agentic CPU categories despite overall revenue expansion
- Nvidia forecasted to distribute 4+ million CPUs this year, though processors remain secondary to core accelerator business
A fresh industry analysis from Wolfe Research indicates that agentic artificial intelligence applications will catalyze approximately 30% expansion in the central processing unit sector through 2028. According to the investment firm, emerging AI systems require substantially more CPU resources working in tandem with GPUs to orchestrate operations, oversee memory allocation, and process sophisticated computational demands.
The analysis additionally highlights that constrained production capacity at TSMC may prove more decisive in determining competitive positioning than pure chip specifications during the coming years.
Rationale Behind Wolfe’s AMD Selection
According to Wolfe Research, Advanced Micro Devices represents the most advantageous investment opportunity when evaluated against company dimensions and existing equity valuations. The firm’s projections suggest server CPU revenues for AMD could surge to $44 billion by 2028, representing substantial growth from the $17 billion baseline in 2026.
Advanced Micro Devices, Inc., AMD
Wolfe’s calculations suggest the AI-fueled CPU market opportunity could contribute approximately $7 in additional earnings per share relative to 2025 figures. This trajectory would elevate AMD’s aggregate earnings capacity to a range between $25 and $30 per share by calendar 2028.
The research emphasizes ARM-based processor architectures as central to this expansion trajectory. Wolfe anticipates ARM-designed CPUs will command between 50% and 75% of the agentic AI processor segment, attributing this to superior power efficiency and enhanced parallel processing capabilities versus conventional x86 architectures.
Intel Expands Sales While Surrendering Market Position
Intel is projected to achieve server CPU revenues reaching $41.5 billion by 2028, climbing from $22.6 billion in 2026. Wolfe calculates this could generate approximately $1 in additional earnings per share compared with 2025 performance.
Nevertheless, the analysis simultaneously projects Intel will experience ongoing market share contraction. Google’s transition to its proprietary Axion processor for orchestration applications directly undermines Intel’s competitive standing.
Intel confronts challenges across both conventional and agentic CPU categories, despite operating within an expanding overall marketplace.
Nvidia and Arm Positioned for Growth Opportunities
Wolfe anticipates Nvidia will distribute over 4 million CPUs during the current year. Approximately 1.3 million units will consist of Vera agentic processors, with majority shipments concentrated in the fourth quarter. Agentic CPU revenues are projected to escalate from $6.6 billion in 2026 to $24.6 billion in 2028.
Despite this expansion, Wolfe emphasizes that processor sales will constitute a substantially smaller revenue stream compared to Nvidia’s AI accelerator division. The earnings per share contribution from CPUs is estimated at merely $0.50 incremental versus 2025 baseline.
Arm Holdings stands to capture value through licensing revenue streams and direct chip sales. Wolfe projects $1.5 billion in royalty income for 2027, ascending to $2.5 billion in 2028. The firm additionally forecasts $2 billion in ARM silicon revenues in 2028, generating approximately $4.50 in earnings power by that timeframe. Wolfe cautions that present ARM equity valuations already appear elevated.
The comprehensive CPU market expansion is also anticipated to generate roughly 20% wafer volume growth across two years, although GPUs and XPUs continue representing the dominant drivers of cutting-edge node demand.
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