Few chipmakers have rewarded investors as handsomely as Advanced Micro Devices (AMD). The stock has delivered an impressive 361.6% gain over the past five years, but Bank of America Corporation believes Advanced Micro still has significant upside. On Thursday, Aug. 13, analyst Vivek Arya raised the firm's 2030 server central processing unit (CPU) market forecast to more than $210 billion from around $170 billion, citing stronger demand for artificial intelligence (AI) compute and memory.
The bank now expects the server CPU market to grow at a 36% compound annual rate, up from 30%, implying nearly 5x growth from the ~$35bn CY25 level. CoreWeave vs Nebius: Both Companies Reported Strong Earnings, But Here's the Stock You Should Buy As Oracle Deepens Its Partnership with AWS, Here's How You Should Play ORCL Stock Netflix Stock Is Cheap and It Has More Than 70% Upside Potential Here Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else.
This expansion could give Advanced Micro more room to grow as AI agents increase demand for computing power across data centers, especially as workloads move beyond traditional AI training. The firm also sees CPUs as additive to overall system total addressable market, while near-record GPU rental prices plus memory spot prices point to a broader compute shortage. Advanced Micro remains the bank's top CPU pick because of its "dual leadership" across frequency plus core count, making this expanding market a compelling catalyst for AMD stock.
Based in Santa Clara, California, Advanced Micro Devices develops AI accelerators, CPUs, GPUs, field-programmable gate arrays (FPGAs), adaptive systems-on-chip (SoCs), and networking products. With a market cap of $788.5 billion, its technology spans data centers, PCs, gaming, embedded systems and cloud infrastructure. The company sells these products through brands including Ryzen, EPYC, Radeon, Instinct and Versal, giving it exposure across several corners of the technology market.
The broad reach has helped keep investors interested, with Advanced Micro's shares climbing 184.3% over the past 52 weeks, advancing 140.2% since the start of the year, and gaining another 14.4% over the past three months. The impressive run has also made AMD stock considerably more expensive. Its shares are currently trading at 63.88 times forward adjusted price-to-earnings and 15.53 times sales, with both multiples sitting well above industry averages and their own five-year historical averages.
This shows that the stock is trading at a rich premium. AMD reported its Q2 FY2026 results on Aug. 4, delivering revenue of $11.54 billion after a 50.1% year-over-year (YOY) increase that topped analysts' $11.35 billion estimate. Data Center revenue jumped 107% YOY to $6.7 billion, powered by strong demand for AMD EPYC™ processors plus AMD Instinct™ GPUs.
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