BofA Securities has adjusted its view of the server CPU opportunity as the industry adapts to the emergence of agentic AI workloads. The bank now estimates the 2030 server CPU total addressable market to be in excess of $170 billion, compared with its earlier $125 billion projection. That revision implies nearly fivefold expansion and represents a 37% compound annual growth rate over 2025-2030, versus a 29% CAGR it had forecast previously.
The firm sees agentic AI as a distinct driver of CPU demand because these workloads differ materially from conventional generative AI. Agentic AI moves away from single prompt-response interactions toward multi-step systems that plan, reason, retrieve information, use external tools, and execute code in a coordinated manner. While accelerators continue to play a central role in inference tasks, BofA highlights that many orchestration and decision-making activities are latency-sensitive, sequential, and computationally intensive - characteristics that favor CPUs.
BofA’s company-level positioning
AMD is named BofA’s top CPU pick. The bank points to AMD’s incumbency, an active product pipeline, and an upcoming AI day anchored by the Venice launch. BofA raised its price objective on AMD to $560 from $500, reflecting higher estimates for both CPU and GPU businesses. The outlook for AMD is reinforced by corporate moves that tie the company more closely to cloud infrastructure: AMD led a funding round for cloud-computing startup TensorWave, which reportedly uses AMD hardware exclusively, and announced a packaging partnership with Amkor Technology.
Nvidia remains BofA’s top sector pick on the strength of its full-stack AI positioning. The bank emphasizes Nvidia’s tight integration across CPU, GPU, and networking domains and notes the company stands to capture upside from increased agentic CPU demand in addition to its leading accelerator franchise. Separately, Nvidia disclosed a six-year AI infrastructure collaboration with SharonAI Holdings to deploy new data center capacity in Australia, planned to operate with up to 40,000 of its Grace Blackwell GB300 GPUs.
Arm saw its price objective increased by BofA to $335 from $245, a change attributed in part to greater long-term potential for chiplet architectures. BofA now employs a fiscal 2031 sum-of-parts methodology for Arm, assigning roughly $229 of value to intellectual property and $106 to chip segments for an aggregate company valuation near $335. The bank describes Arm’s shares as fairly valued. In an external update noted by market participants, Mizuho raised its Arm price target to $500 from $425 while maintaining an Outperform rating.
Intel received a two-notch upgrade from BofA to Buy with a $135 price objective. The bank’s higher estimates incorporate both near-term CPU upside and a longer-term foundry opportunity tied to advanced packaging and leading-edge wafers. BofA said it has increased confidence in Intel’s ability to address industry constraints in those areas and to participate in the enlarged agentic CPU market. Analysts now see potential 2030 earnings per share above $6, versus the prior $3-4 range. Separately, Northland downgraded Intel to Market Perform from Outperform, citing valuation concerns.
Qualcomm is rated Underperform by BofA despite market expectations for AI CPU announcements at the company’s June 2024 AI Day in New York City. BofA retains a cautious stance on Qualcomm given what it views as tough competition and a limited addressable market. Outside of BofA’s view, other firms have taken different stances: Bernstein upgraded Qualcomm to Outperform and raised its price target, and Tigress Financial Partners also increased its price target.
What this means for the market
BofA’s revised forecasts and company recommendations reflect a reassessment of where compute value will accrue as agentic AI proliferates. The bank’s analysis suggests a larger role for server CPUs in AI stacks than previously assumed, while leaving room for accelerators to remain central for inference workloads. The changes in price objectives and ratings across AMD, Nvidia, Arm, Intel, and Qualcomm underscore differing competitive positions and addressable-market outlooks.
Data and caveats
The projections and analyst actions summarized here are those reported by BofA and other noted brokerage firms. The commentary explains the bank’s view on workload characteristics and the firms it favors or disfavors based on incumbency, product pipelines, strategic partnerships, and valuation assessments.