Wolfe Research described the tone of a pre-quiet period call with AMD management as constructive and said there is "substantial room for upside to consensus for both CY26 and 27," with upside expected to come from incremental CPU strength and the potential for more gigawatt-scale MI450 customers.
Analyst Chris Caso noted in his research note that AMD management conveyed confidence that wafer supply is sufficient "to support very material growth in the server business this year and next." Wolfe said wafer allocation could be positioned to meet demand well ahead of current consensus expectations.
Despite AMD's recent price performance - a 143% gain since the start of April - Wolfe laid out a scenario that drives earnings power to $25-30. That framework breaks down into about $14 in base earnings per share presumed to come from one gigawatt each of MI450 capacity for OpenAI and Meta, another $7 attributed to agentic CPU demand, and an incremental $3-4 in EPS for every additional gigawatt of MI450 capacity beyond the two named customers.
Under that bull-case EPS construct, Wolfe calculated the shares would be trading at under 20 times that earnings power. The research note also pointed to a near-term company catalyst - an AMD analyst event scheduled for July - as a potential trigger for updated market expectations.
On the supply side, AMD told Wolfe that "supply of everything is tight," but that the company can reallocate wafer capacity from PC and gaming segments toward datacenter needs where necessary. Wolfe expects MI450 shipments to start in the latter part of the third quarter, with a ramp in the fourth quarter driven primarily by Meta and OpenAI. AMD anticipates "a fairly significant jump" in fourth-quarter revenue and then a further increase in the following first quarter.
Wolfe also reported that AMD raised its server CPU total addressable market above its prior $120 billion projection for 2030. The firm said agentic inference workloads were cited by AMD as the main driver behind the upward revision to TAM.
Context and implications
- Wolfe's scenario places material additional earnings underpinned by both MI450 accelerator adoption and a separate uplift from agentic CPU demand.
- Wafer allocation flexibility is presented as a practical mechanism for AMD to prioritize datacenter growth if demand accelerates.
- Upcoming company events and shipment timing for MI450 are positioned as near-term information catalysts that could influence market perceptions.