Raymond James upgraded Advanced Micro Devices (NASDAQ: AMD) to Strong Buy from Outperform on Tuesday, citing the chipmaker’s direct earnings leverage, datacenter positioning and market-share gains in a rapidly expanding server CPU market.
The firm’s base-case forecast projects the global server CPU market to reach approximately $201 billion by 2030, growing at a compound annual rate of 44% over five years. The projection is anchored in the expansion of AI-driven workloads, with Raymond James extending its AI Factory framework to the server segment. The breakdown includes $33.5 billion for conventional datacenter CPUs, $83 billion for AI head-end CPUs and $85 billion for agentic CPUs.
Analyst Simon Leopold highlighted AMD’s strongest combination of earnings leverage and market-share gains in the datacenter space. Nvidia’s long-term framework estimate of $200 billion for the server CPU market is broadly in line with Raymond James’ base case, while AMD’s internal projection of $220 billion reflects a more aggressive scenario tied to higher agent adoption.
The growth outlook is driven by agentic AI, where persistent agents generate orchestration, retrieval, database, sandbox and tool-execution workloads predominantly executed on CPUs. Demand is expected to scale with active agents, workflow duration and concurrency rather than model parameters or token generation. However, Raymond James cautioned that workload growth will not directly translate into proportional hardware shipments, as higher utilization, software efficiency, custom silicon and offload mechanisms will absorb part of the increase.
Arm (NASDAQ: ARM) is positioned to benefit from server royalty growth and custom silicon development, while Intel (NASDAQ: INTC) remains exposed to market-share erosion despite an improving overall market.
