Advanced Micro Devices (NASDAQ: AMD) has joined the $1 trillion market capitalization club, and BofA Securities believes the semiconductor giant has room to climb further as artificial intelligence drives stronger demand for server CPUs.
BofA analyst Vivek Arya raised his AMD price target to $720 from $620 while maintaining a Buy rating and naming AMD the firm’s top CPU pick. The new target could imply a market valuation approaching $1.2 trillion over the next 12 months.
The bullish outlook centers on rapid expansion in the server CPU market. BofA estimates the total addressable market could surge from $61 billion in 2026 to $211 billion by 2030, with roughly $180 billion tied to AI workloads.
BofA sees AMD as a major beneficiary due to its competitive x86 server processors and increasing exposure to AI-focused data centers. The $720 target applies a 30-times multiple to BofA’s calendar 2028 earnings estimate, up from 27 times previously. The firm also increased its 2027 and 2028 AMD earnings-per-share forecasts by 2% to 3%.
Agentic AI is expected to become an important growth driver. Unlike traditional AI systems, autonomous AI agents perform multi-step tasks involving code execution, databases and external tools, increasing the importance of CPUs alongside GPUs.
BofA forecasts AI-related CPU shipments rising from 16 million units in 2026 to 53 million by 2030. Average server CPU selling prices are projected to increase from about $1,600 to $2,600 over the same period as demand shifts toward higher-value AI configurations.
The firm also maintained Buy ratings on NVIDIA (NASDAQ: NVDA) and Intel (NASDAQ: INTC), while identifying NVIDIA as its top overall semiconductor pick.
AMD shares rose 0.6% to $632.99 in early Friday trading and have gained more than 13% this week. Investors will now focus on AMD’s server CPU roadmap, hyperscaler spending and upcoming earnings for signs that AI-driven CPU demand is meeting BofA’s expectations.
