Bank of America reiterated its positive outlook on Advanced Micro Devices (AMD). The firm named AMD its top CPU stock.
Analyst Vivek Arya raised the bank's forecast for the server CPU market. The bank now projects the market to exceed $210 billion by 2030. This marks an increase from the previous estimate of $170 billion. The new forecast implies a 36% compound annual growth rate for the market through 2030.
The bullish revision stems from the rise of "agentic AI." Agentic AI involves AI systems performing complex, multi-step tasks. BofA expects this will increase the role of CPUs. CPUs will shift to an "orchestration control plane" in data centers. This will alter the CPU-to-GPU ratio from 1:4 towards 1:1.
Recent options data shows a put-to-call open interest ratio of over 1.1. This indicates more bearish than bullish contracts are open.