Advanced Micro Devices (AMD) saw its stock price climb sharply on Thursday, rebounding from earlier losses in the week as investors reacted to an upgraded outlook from Bank of America. The chipmaker's shares closed at approximately $488.40, marking a gain of $36.00, or nearly 8%, from Wednesday's closing price of $452.40. The move erased a decline seen on Wednesday and kept the focus on the growing demand for AI infrastructure.
Bank of America Lifts Price Target and Market Forecast
In a research note released Thursday, Bank of America raised its price target for AMD to $560 from $500, while also significantly increasing its forecast for the server CPU total addressable market (TAM) in 2030. The bank now projects the TAM will exceed $170 billion, up from a previous estimate of $125 billion. The revision was driven by the potential of agentic AI, a form of artificial intelligence that can autonomously perform tasks, which the bank believes will create a larger opportunity for central processing units (CPUs) than previously anticipated.
Analyst Vivek Arya described agentic AI as "a powerful demand accelerant that expands the CPU opportunity and lifts both x86 incumbents and ARM challengers." BofA named AMD its top pick in the CPU space, citing the company's strong product pipeline and its upcoming AI-focused event. While Nvidia remains the bank's top overall semiconductor pick, AMD stands out in the CPU segment, according to the note.
AMD's Position in the AI Landscape
BofA's analysis highlighted that AMD's appeal extends beyond just graphics processing units (GPUs), which are traditionally used for AI training and inference. The bank argued that CPUs are better suited for latency-sensitive and input-output-heavy workloads typical of agentic AI. This aligns with AMD's own messaging. In a June 9 blog post, the company emphasized that its EPYC chips are designed for rack-scale agentic AI workloads. AMD claimed that its current EPYC 9965 processor delivers 2.37 times the rack-level throughput of an Nvidia Vera baseline in a simulated 100 kW rack setup. The next-generation EPYC "Venice" is expected to improve that ratio to 3.30 times, according to AMD.
However, some skepticism remains. Tom's Hardware noted on June 10 that AMD's comparisons did not involve testing full rack setups. For the Venice projections, AMD relied on modeling, scaling estimates, and extrapolated benchmarks rather than actual measured rack results.
Broader Market Context
The positive sentiment for AMD was part of a broader uptick in AI hardware stocks, which rose in premarket trading following signs of robust spending in the data-center supply chain. Oracle's commitment to invest approximately $70 billion in data centers and computing equipment next year provided a tailwind for the sector, with Nvidia, Dell, and Super Micro also trading higher. However, Oracle shares themselves faced some pressure due to funding concerns.
AMD's recent earnings remain a focal point for investors. The company reported first-quarter revenue of $10.3 billion in May, a 38% year-over-year increase. Data-center revenue surged 57% to $5.8 billion, driven by strong demand for EPYC processors and continued growth in Instinct GPU shipments. For the second quarter, AMD expects revenue of around $11.2 billion, plus or minus $300 million.
Upcoming Catalyst: Advancing AI 2026
Investor attention is now turning to AMD's Advancing AI 2026 event, scheduled for July 22-23 in San Francisco. The conference will feature sessions on AI infrastructure, the AMD Helios platform, and enterprise AI deployment. The event provides AMD with an opportunity to elaborate on its server roadmap, particularly the Venice platform, and to address the growing focus on agentic AI workloads. CEO Dr. Lisa Su's recent comments about "strong momentum as inferencing and agentic AI drive increasing demand for high-performance CPUs and accelerators" have resonated with investors, reinforcing the bullish case for the stock.
