BofA Raises AMD Price Target to $720, Citing Tripling Server CPU Market by 2030

Bank of America has significantly raised its price target on Advanced Micro Devices (NASDAQ: AMD) to $720 from a previous $620, projecting that a new wave of 'agentic AI' will cause the server processor market to triple by the end of the decade. The bank reiterated its Buy rating on the stock and named AMD its top pick among CPU manufacturers.

The Upgraded Outlook

In a note to clients, BofA Securities analyst Vivek Arya based the new target on a valuation of 30 times the bank's calendar year 2028 earnings per share (EPS) estimate, an increase from a previous multiple of 27x. The firm also raised its CY2027 and CY2028 EPS estimates for AMD by 2–3%, citing expectations for higher average selling prices (ASPs) for central processing units.

The new price target implies a potential market capitalization of $1.2 trillion for AMD over the next 12 months, according to the note, following the company's recent achievement of the $1 trillion milestone.

'Agentic AI' to Drive CPU Demand

The core of BofA's optimistic outlook is the projected expansion of the server CPU total addressable market (TAM), which the firm forecasts will grow from $61 billion in 2026 to $211 billion by 2030. The bank estimates that $180 billion of this future market will be driven specifically by artificial intelligence workloads.

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BofA argues that 'agentic AI'—systems where software agents autonomously perform complex, multi-step tasks—will be a structural demand driver for CPUs, not just the graphics processing units (GPUs) that have dominated the AI hardware conversation. The firm's thesis rejects a zero-sum view, stating that "CPUs expand the AI system TAM rather than substitute for accelerators" because they are crucial for managing latency and task completion.

Market Projections and Competitive Landscape

BofA's model points to a significant shift in both the volume and value of server processors. Key projections through 2030 include:

• AI CPU unit sales nearly tripling from 16 million in 2026 to 53 million.
• Blended server CPU average selling prices rising from approximately $1,600 to $2,600.

Citing insights from Creative Strategies CEO Ben Bajarin, BofA noted that ARM-based architecture could capture up to 40% of the server CPU market by decade's end. BofA also reiterated Buy ratings on NVIDIA (NASDAQ: NVDA), its top overall sector pick, and Intel (NASDAQ: INTC), citing its long-term potential as a foundry service provider.