Morningstar

AMD: Firm Raises the Server CPU Bar Yet Again at Its Advancing AI Event

We’ve raised our fair value estimate of AMD stock.

The AMD Logo photographed off the screen of an iphone.
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Securities in This Article
Advanced Micro Devices Inc
(AMD)

Key Morningstar Metrics for Advanced Micro Devices

  • Fair Value Estimate
    : $530.00
  • Morningstar Rating
    : ★★★
  • Morningstar Economic Moat Rating
    : Narrow
  • Morningstar Uncertainty Rating
    : Very High

Advanced Micro Devices’ AMD Advancing AI event introduced a flurry of artificial intelligence products, led by its Helios AI racks and Venice CPUs. AMD also hosted an investor event and boosted a host of its previous forecasts for the AI total addressable market.

Why it matters: The highlight for us was AMD boosting its server CPU TAM to $220 billion, which is comparable to the $200 billion TAM provided by Nvidia in recent weeks. This is up from AMD’s March forecast of $120 billion and our prior estimates for the AI market.

  • AMD is targeting 50% market share of this TAM. We don’t expect AMD to get there with $110 billion of server CPU revenue by 2030 (versus $9 billion in 2025), but we think AMD’s leadership in x86 CPUs and the rising tide of agentic AI will get AMD close to this goal.
  • We’re also pleased, but less stunned, that AMD lifted its 2030 AI TAM for the entire AI accelerator market (including GPUs and related memory, CPUs, and networking) to $1.4 trillion, up from $1.0 trillion announced in November. In short, there’s no slowdown in AI compute demand.

The bottom line: We raise our fair value estimate for narrow moat AMD to $530 per share from $450 as we boost our near-term and long-term server CPU growth assumptions. Rival Intel’s stellar second quarter results also suggest that our prior AMD server CPU forecasts were conservative.

  • Shares fell about 3% during the event but rose after hours in sympathy with Intel. We suspect AMD’s biggest new news from the event would have been its partnerships with Anthropic and Microsoft, but both were announced earlier in the week. Shares appear fairly valued to us.

Coming up: AMD’s TAM, including PCs, embedded, and data center, is expected to reach $2.0 trillion by 2030, up from $365 billion in 2025, which equates to a 40% CAGR.

  • AMD’s revenue in 2025 suggests that it captured about 10% of this TAM. Our 2030 revenue estimate of $185 billion is a comparable 10% of the new $2.0 trillion TAM.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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