Key Takeaways
- Bank of America’s Vivek Arya increased his 2030 server CPU market forecast to $170 billion from $125 billion, designating AMD as his preferred choice in the sector
- Arya boosted AMD’s price target to $560 from $500, highlighting the company’s strategic positioning and forthcoming “Venice” server processor lineup
- Citi elevated AMD to Buy from Neutral and increased its price target to $575 from $460, arguing the market undervalues AMD’s GPU capabilities
- Citi projects AMD will capture the majority of Meta’s GPU orders with custom MI450 processors launching in late 2026, estimating AMD’s AI revenue will hit $33 billion by 2027
- Shares of AMD finished Thursday’s session up approximately 8%, propelled by consecutive optimistic analyst ratings
While Thursday appeared uneventful for the technology sector overall, Advanced Micro Devices had other plans.
Advanced Micro Devices (AMD) climbed approximately 8% during Thursday’s trading session after receiving bullish recommendations from two prominent Wall Street institutions within a single day, pushing shares to roughly $488.66.
Advanced Micro Devices, Inc., AMD
Bank of America’s Vivek Arya initiated the rally with a morning research note. He significantly increased his 2030 server CPU market size projection to $170 billion from a previous estimate of $125 billion. Arya designated AMD as his favored pick within the CPU segment.
The analyst identified agentic AI as the primary catalyst behind this revised outlook. His model anticipates a 37% compound annual growth rate for server CPUs spanning 2025 through 2030. Such robust expansion positions AMD as a central beneficiary.
Accompanying this market expansion forecast, Arya elevated his AMD price objective to $560 from $500, emphasizing the company’s favorable long-term competitive position and the imminent arrival of its “Venice” next-generation server chip architecture.
Citi Follows With Bullish Stance
Citi reinforced the positive sentiment later in the day. Research analyst Atif Malik shifted his AMD rating to Buy from Neutral while boosting 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 company’s GPU opportunity remains significantly undervalued by investors.
Citi anticipates AMD will secure the bulk of Meta‘s GPU requirements through custom MI450 processors, which deliver superior total cost of ownership compared to competing off-the-shelf GPU solutions.
The firm referenced a previously disclosed arrangement between AMD and Meta — a six-gigawatt capacity agreement spanning four years, structured with a 160 million share common stock warrant component. Initial deployment of the first one-gigawatt phase is slated for the latter half of 2026 continuing into 2027.
Citi’s analysis suggests each gigawatt increment within this partnership generates approximately $15 billion in AMD revenue.
Substantial AI Revenue Projections
Building on the Meta partnership and expanding GPU traction, Citi now projects AMD’s AI-related sales will reach $33 billion in 2027, representing 137% year-over-year growth, followed by $50.8 billion in 2028, a 54% increase.
These projections would substantially elevate AMD’s position in the GPU market beyond current Wall Street expectations.
Regarding CPUs, Citi also revised its 2030 addressable market estimate upward to $136.7 billion from $131.5 billion following the Computex conference. This reflects a 36% compound annual growth rate from $29.3 billion in 2025.
Citi’s updated 2026-2028 earnings per share forecasts exceed Street consensus by 12% to 13%. The firm’s $575 price target derives from a sum-of-the-parts valuation framework: $281 per share attributed to data center GPU operations, $204 per share for CPU business, additional value from client, gaming, and embedded segments, plus approximately $35 per share in net cash.
AMD’s 52-week trading range spans 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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