Analysts argue that the AI infrastructure buildout is creating a much larger market for server CPUs than previously expected.
- Morningstar expects AMD’s revenue to grow at a 40% compound annual rate between 2026 and 2030, driven by the rise of agentic AI, which it says will require significantly more server CPUs to orchestrate AI workloads.
- Susquehanna lifted its price target to $500 from $450, maintained a ‘Positive’ rating, and said recent customer wins support the upcoming ramp of AMD’s MI450 AI platform.
- UBS raised its price target to $730 from $700 and maintained a ‘Buy’ rating, citing expectations for robust server CPU growth.
Shares of Advanced Micro Devices Inc. (AMD) are in focus ahead of the chipmaker’s second-quarter earnings due after the bell on Tuesday, with Wall Street looking beyond another quarter of AI-driven growth for signs that the company’s rapidly expanding server CPU opportunity remains on track.
Wall Street has grown increasingly optimistic ahead of the report, with analysts arguing that the AI infrastructure buildout is creating a much larger market for server CPUs than previously expected, even as demand for AI accelerators remains robust.
AMD shares were up more than 1% in Monday morning’s trade.
Wall Street Is Turning More Bullish On Server CPUs
Wall Street highlighted a recent major shift in AMD’s investment narrative over the past few months, with analysts pointing to the growing importance of server CPUs alongside AI GPUs.
At AMD’s Advancing AI event last month, CEO Lisa Su raised the company’s estimate for the AI server CPU total addressable market to $220 billion by 2030, from the $120 billion estimate the company provided in May.
Su attributed the increase to the rapid adoption of AI agents, which require significantly more CPUs to orchestrate workloads across AI clusters.
The revised outlook has resonated with analysts. According to TheFly, Susquehanna said server CPUs are likely to deliver upside as the addressable market continues to expand, while Morningstar expects agentic AI to drive exponential growth in CPU demand over the rest of the decade.
Morningstar expects AMD’s revenue to grow at a 40% compound annual rate between 2026 and 2030, driven by the rise of agentic AI, which it says will require significantly more server CPUs to orchestrate AI workloads.
Analysts Lift AMD Stock Price Targets Ahead Of Earnings
Susquehanna lifted its price target to $500 from $450, while keeping a ‘Positive’ rating on the stock. The firm also said recent customer announcements support the upcoming ramp of AMD’s MI450 AI platform, which is expected to begin shipping later this year.
UBS raised its price target on AMD shares to $730 from $700, while keeping a ‘Buy’ rating. The firm said AMD’s Advancing AI event strengthened its long-term outlook for the company, citing expectations for significant server CPU growth.
Jefferies also raised its price target to $640 from $515, while keeping a ‘Buy’ rating, saying the event reinforced AMD’s leadership in server CPUs and made its AI growth story more tangible.
Analyst Blayne Curtis said new partnerships with Anthropic and OpenAI, along with the expected ramp of the Helios platform and launch of ROCm.AI, could strengthen AMD’s competitive position against Nvidia.
Morningstar has a $530 fair value estimate on AMD shares, implying about 10% upside from current levels. The firm expects adjusted gross margin to expand from 52% in 2025 to 56% in 2026, before reaching 57% by 2030.
According to Fiscal.ai data, AMD is expected to report earnings per share (EPS) of $1.61 on revenue of $11.3 billion in Q2, up from $0.48 per share on revenue of $7.7 billion a year earlier.
What Retail Traders Think About AMD
Retail sentiment on Stocktwits around AMD trended in the ‘bullish’ territory, with message volumes at ‘high’ levels at the time of writing.
AMD stock is up 125% year-to-date and 180% over the past 12 months. The S&P 500 ETF (SPY) is up 22% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 26%.
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