BofA lifts AMD target to $720 from $620 on server CPU growth

The update builds on a shift in how AI infrastructure is being built. Rather than treating CPUs as secondary to GPUs, BofA's view is that CPUs increasingly complement GPUs, coordinating workloads and managing data in complex AI systems. That is already showing up in AMD's numbers: client business revenue was up 23% year over year to $3.1 billion on strong Ryzen demand, and data center revenue rose 107% in the second quarter to $6.72 billion, driven by EPYC server CPUs and Instinct GPUs.

AMD's position is also broader than a single chip category. The company offers platforms combining EPYC CPUs with Instinct GPUs and networking technologies, which BofA sees as a way to benefit from the overall expansion of AI infrastructure. Notably, that view does not depend on AMD displacing Nvidia as the dominant provider of AI accelerators, which suggests the bank is underwriting AMD as a participant in a growing market rather than a winner-take-all challenger.

The harder question is what the stock already reflects. AMD's rally has pushed expectations sharply higher, reaching a $1 trillion valuation, so the outcome hinges on whether its AI ambitions can justify that level. For investors holding the shares after the run, the test is likely to be whether data center and client revenue keep compounding at the pace that made the higher target defensible — a case that, for now, rests on BofA's market forecast rather than AMD's own guidance.