"Better Than Intel... U.S. AMD, a Hidden Beneficiary in AI Data Centers" [Click e-Stock]
AMD Eyes Expansion in Server Market Share
Target Price Raised from $355.26 to $380.93
"Virtuous Cycle: GPU Demand Driving CPU Growth"
According to analysis from the securities industry, U.S. semiconductor company AMD is increasing its investment appeal, buoyed by expectations of expanding its market share in the server CPU (central processing unit) sector.
On May 7, Hana Securities reported that analyst Kang Jae-gu maintained a "Buy" rating on AMD, stating, "We expect a positive stock price trend as market participants’ interest in server CPUs grows." The analyst also raised the target price from $355.26 to $380.93.
In its recently announced results for the first quarter of fiscal year 2026, AMD reported revenue of $10.3 billion and operating profit of $2.5 billion, exceeding market expectations. Analyst Kang explained, "Investment to expand the artificial intelligence (AI) business continues, resulting in increased R&D expenses," but also noted, "The strong performance of the data center business unit, which now accounts for a larger share of sales, is driving overall results."
Kang further analyzed that AMD is a more attractive investment than Intel. Although Intel is also expanding its AI accelerator business, such as GPUs (graphics processing units), its efforts to defend CPU market share have had only limited effect.
He noted, "Intel stated during its earnings release that it offset supply constraints by raising prices," whereas "AMD attributed its strength more to increased sales volume than to price effects." He added, "Lisa Su, CEO of AMD, also mentioned the possibility of securing more than 50% market share in the server CPU segment over the medium to long term."
It has also been noted that AMD is leveraging its GPU competitiveness to further increase its server CPU market share. In AI data centers, not only GPUs but also CPUs, memory, and networking equipment are required; therefore, GPU competitiveness can translate into higher CPU sales.
Analyst Kang stated, "Intel is also expanding its AI accelerator (GPU) business, but its efforts to defend CPU market share remain limited," and added, "AMD is connecting GPU demand to CPUs through a platform strategy that integrates the MI450, Helios, and EPYC CPUs."
AMD expects the server CPU market itself to grow rapidly due to the spread of agentic AI. As the adoption of inference and agentic AI increases, demand for data movement and parallel processing will rise, further highlighting the importance of CPUs.
Analyst Kang said, "Reflecting demand for agentic AI, AMD explained that the server CPU market could grow at an average annual rate of over 35% through 2030," adding, "The total addressable market (TAM) is expected to increase from the current $60 billion to over $120 billion."
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Another positive factor is the materialization of demand from large customers such as OpenAI and Meta. Kang noted, "Some customers’ demand forecasts have already exceeded previous plans," and predicted, "From 2027, as mass shipments of the MI450 and Helios begin, the growth of the data center business will accelerate even further."
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