Key Takeaways
- Agentic AI and orchestration workloads will expand the CPU market by approximately 30% by 2028, according to Wolfe Research
- Advanced Micro Devices emerges as the leading beneficiary based on market position and current valuation metrics
- Server CPU revenue for AMD projected to reach $44 billion by 2028
- ARM architecture chips anticipated to dominate 50–75% of the agentic AI CPU segment
- Intel’s market position weakens in orchestration and agentic segments despite absolute revenue increases
- Nvidia projected to deliver 4+ million CPU units this year, though CPUs represent a minor business segment
A fresh analysis from Wolfe Research indicates that the emergence of agentic AI applications will catalyze approximately 30% expansion in the central processing unit market by the end of 2028. According to the investment firm, next-generation AI systems require significantly greater CPU resources working in tandem with GPUs to orchestrate operations, oversee memory functions, and process intricate computational demands.
The research note also highlights that constrained production capacity at TSMC may ultimately determine competitive positioning more significantly than pure chip capabilities in the coming years.
AMD Positioned as Primary Beneficiary According to Wolfe
Wolfe Research identifies Advanced Micro Devices as the company poised to capture the greatest gains when measured against its current market capitalization and equity valuation. The firm’s analysis suggests server CPU revenues for AMD could surge to $44 billion by calendar year 2028, compared to $17 billion anticipated in 2026.
Advanced Micro Devices, Inc., AMD
Additionally, Wolfe calculates that the CPU opportunity stemming from AI workloads could contribute approximately $7 per share in additional earnings compared to 2025 levels. This growth trajectory would elevate AMD’s overall earnings capacity to a range of $25 to $30 per share by 2028.
The investment firm emphasizes ARM architecture as fundamental to this expansion. Wolfe anticipates ARM-based processors will secure between 50% and 75% of the agentic AI CPU market, attributing this to superior performance-per-watt metrics and enhanced multi-threaded processing capabilities relative to legacy x86 architectures.
Intel Expands Revenues While Surrendering Market Position
Intel is projected to increase server CPU revenues to $41.5 billion by 2028, advancing from $22.6 billion in 2026. According to Wolfe’s models, this growth could deliver roughly $1 in additional earnings per share compared to 2025 baseline figures.
Neverthstanding revenue growth, the firm anticipates continued market share erosion for Intel. Major cloud providers like Google are transitioning to proprietary solutions such as the Axion processor for orchestration tasks, directly undermining Intel’s market dominance.
Intel confronts competitive pressure across both traditional server segments and emerging agentic CPU categories, even as total addressable market expands substantially.
Nvidia and Arm Positioned for Growth Opportunities
Wolfe’s forecast suggests Nvidia will distribute over 4 million CPU units during the current year. Approximately 1.3 million units will consist of Vera agentic CPUs, with the majority shipping in Q4. Revenue from agentic CPUs is modeled to climb from $6.6 billion in 2026 to $24.6 billion by 2028.
Despite this expansion trajectory, Wolfe emphasizes that CPU operations will continue representing a relatively minor component of Nvidia’s business when compared to its AI accelerator portfolio. The incremental EPS contribution from CPU products is estimated at just $0.50 above 2025 baseline levels.
Arm Holdings stands to capture value through licensing revenue streams and its own silicon products. Wolfe projects $1.5 billion in royalty income for 2027, escalating to $2.5 billion in 2028. The firm also forecasts $2 billion in direct ARM silicon revenue in 2028, supporting approximately $4.50 in earnings power by that timeframe. However, Wolfe cautions that current ARM equity valuations appear stretched relative to fundamentals.
The comprehensive CPU market expansion is also expected to generate approximately 20% growth in wafer demand over a two-year period, though GPU and XPU production continues to represent the dominant driver of leading-edge manufacturing capacity.
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