-- Advanced Micro Devices (AMD) is expected to capture about half of the total addressable market for server central processing units, which the company expects will exceed $120 billion by 2030, BofA Securities said in a note emailed Wednesday.
The chip maker's updated forecast for server CPU TAM is double its previous estimate amid rising agentic artificial intelligence demand, according to the brokerage.
The server CPU market is now expected to grow more than 35% annually, reaching over $120 billion by 2030, AMD Chief Executive Lisa Su said late Tuesday during an earnings call, according to a FactSet transcript.
The company previously expected market growth of 18% annually over the next three to five years.
BofA expects AMD to capture a roughly 50% share of the server CPU market, with the remaining half split between rivals Intel (INTC) and Arm (ARM).
"Rising CPU TAM is good for all CPU vendors, but we expect AMD to maintain/expand share on (the) back of broad portfolio, rising enterprise focus, continued cloud leadership and consistent roadmap execution," BofA analyst Vivek Arya wrote. "Separately, we expect AMD to potentially announce other large customers for GPUs for (2027) and beyond."
Shares of AMD surged 18% in Wednesday afternoon trade.
The company reported stronger-than-expected first-quarter results late Tuesday, as demand for AI infrastructure pushed data center revenue higher year over year.
"Inferencing and agentic AI are increasing the need for server CPU compute as these workloads require additional CPU processing for orchestration, data movement, and parallel execution in addition to serving as the head nodes for GPUs and accelerators," Su told analysts during the earnings call. "As a result, we are seeing both stronger near-term demand and deeper engagement with customers on long-term capacity planning."
AMD currently represents about 6% of the AI TAM, and that figure is expected to grow toward double digits by 2030, Arya said.
Still, AMD remains "exposed to uncertain share allocation between numerous OpenAI suppliers" including Nvidia (NVDA), Broadcom (AVGO) and Cerebras Systems, he said.
Following AMD's first-quarter results, BofA raised the company's 2026 and 2027 pro-forma earnings per share estimate by 9% each to $7.28 and $11.80. The brokerage is projecting AMD's 2030 EPS potential at more than $27, above management's $20-plus target.
BofA reiterated AMD's buy rating and lifted the price target to $450 from $310.
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