Bank of America Securities has doubled down on Advanced Micro Devices (AMD) as the leader in server processors, raising its price target on the chipmaker to $700 from $650 and lifting its forecast for the server CPU market to above $240 billion by 2030. The move comes after AMD's latest earnings and reflects growing confidence that the company can meet surging demand as artificial intelligence evolves from simple chatbots to autonomous "agentic" systems.
The bank's analysts now see the server CPU market growing from a previous estimate of $210 billion to more than $240 billion by the end of the decade. That upward revision is driven by the expectation that AI workloads will increasingly require chips that can not only process data but also take actions—a shift that could dramatically expand the need for powerful server processors.
Why AMD's supply plans matter
At the heart of BofA's bullish stance is visibility. The bank said it now has a clearer line of sight on AMD's CPU unit supply for 2027 and 2028, which reduces uncertainty about the company's ability to deliver chips to customers. In the semiconductor industry, having firm production plans is critical because it allows analysts to model future revenue with greater confidence.
"Long-term market-size math is helpful, but stocks often move on how predictable the next few years look," the bank noted. When investors believe a company has solid production plans, the range of likely shipments narrows, making future earnings feel less risky. That typically reduces the "discount" applied to those cash flows, supporting a higher valuation multiple today.
By contrast, BofA cut Intel's price target to $80 from $100, pointing to "low visibility" around near-term results and, more importantly, Intel's 2027 CPU supply planning. The bank's analysts argue that Intel's weaker visibility could keep larger "haircuts" in valuation models, allowing the gap between the two chipmakers to persist well before any 2030 forecasts are tested.
The rise of agentic AI
The term "agentic AI" refers to artificial intelligence systems that can perform tasks autonomously—not just answer questions or generate text, but take actions like booking flights, managing schedules, or executing trades. This next phase of AI development is expected to require far more computing power, as these systems need to process multiple steps, interact with other software, and make decisions in real time.
For server CPU makers like AMD and Intel, that translates into a larger addressable market. BofA's revised estimate suggests the bank believes the shift to agentic AI will be a major growth driver for the entire sector, but AMD is positioned to capture a larger share thanks to its product roadmap and manufacturing partnerships.
AMD has been gaining market share in data centers over the past few years, challenging Intel's long-standing dominance. Its EPYC server processors have been well-received, and the company has also made inroads into AI accelerators, though that segment is dominated by Nvidia. BofA also cut its price target for Nvidia, though the brief does not specify the new figure.
What it means for investors
For everyday investors, this analyst call is a reminder that stock prices are often driven by expectations about the next few years, not just the distant future. A higher price target from a major bank can boost sentiment, but it's important to remember that these are just opinions—not guarantees.
The contrast between AMD and Intel highlights how supply chain visibility can affect valuations. Companies that can demonstrate reliable production plans are often rewarded with higher multiples, while those with uncertain outlooks may see their stocks trade at a discount. This dynamic is especially pronounced in the semiconductor industry, where capacity constraints and manufacturing delays can make or break a product cycle.
Investors should also consider the broader context. The AI boom has fueled a massive rally in chip stocks, but some analysts have warned about a potential slowdown in AI spending from 2028. BofA itself flagged this possibility, even as it raised its long-term market estimate. That suggests the bank sees strong growth in the near to medium term, but with some caution further out.
For those holding AMD or Intel shares, the key takeaway is that analyst price targets are not set in stone. They reflect a snapshot of expectations based on current data and assumptions. As new earnings reports, product launches, and supply chain updates emerge, these targets are likely to change.
In the meantime, the server CPU race is far from over. AMD's momentum is clear, but Intel is not standing still, and Nvidia's dominance in AI accelerators adds another layer of competition. The next few years will be critical in determining who ultimately leads the data center chip market.
For more on how AI is reshaping the chip landscape, see our coverage of Nebius's AI expansion and the recent turmoil in AI stocks.
