Bank of America revamps AMD stock price target

Advanced Micro Devices (AMD) has gained astir 42% successful the past month, according to Yahoo Finance astatine the clip of writing, Friday afternoon, April 17. Meanwhile, the SPDR S&P 500 scale (SPY) is up somewhat little than 6% successful the aforesaid period.

AMD is outpacing the S&P 500 by much than 35%. That is impressive, but what is driving these gains?

The institution volition study net connected May 5, and the expectations are high.

The sentiment has changed importantly pursuing the stock’s dip aft the February net report.

At the extremity of February, AMD expanded its concern with Meta, and Bank of America reset its forecast for the stock.

The value of CPUs for the AI information halfway buildout is growing. And CPUs are AMD’s halfway strength. Both AMD and Intel person reported a surge successful CPU demand, arsenic reported by Tom’s Hardware.

Bank of America expert Vivek Arya and his squad revised their server CPU forecasts, updating their sentiment connected AMD banal up of earnings.

“We judge CPUs are progressively becoming indispensable successful sequential and latency-sensitive workloads, and are an integral portion of wide AI infrastructure,” Arya wrote.

The squad expects CPUs to consistently marque up an astir 5% stock of the wide AI information halfway full addressable marketplace (TAM) of astir $1.4 trillion. They estimation a +21% compound yearly maturation complaint (CAGR) toward a TAM of $70+ cardinal by 2030, up from astir $28 cardinal successful 2025.

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Analysts said that the cardinal operator of their server CPU TAM maturation is the increasing server portion TAM. It is estimated to turn to 25 cardinal units by 2030, up from conscionable astir 17 cardinal successful 2025, for a +8% CAGR.

The squad noted that the server CPU marketplace is getting precise crowded.

They judge that AMD is the person successful unreality offerings and that, successful the adjacent term, it is champion positioned with its starring pipeline of current-gen Turin CPUs and the upcoming Venice line.

Analysts said they similar AMD’s beardown CPU merchandise pipeline and incumbency successful unreality server CPUs, arsenic good arsenic the upcoming archetypal 2.0 to 2.5 GW of compute capacity, which includes some GPUs, CPUs, and web interface cards. The buildout is slated for the 2nd fractional of 2026 astatine Meta, OpenAI, and others.

The squad expects AMD to proceed to pb successful the unreality portion expanding its vulnerability successful the accepted endeavor market, with income increasing to astir $24 cardinal by 2030 astatine astir 34% marketplace share.