$210 billion is the figure Bank of America placed on the 2030 server central processing unit market Thursday, up from a prior estimate of around $170 billion. Analyst Vivek Arya cited stronger demand for artificial intelligence compute and memory, raising the firm's projected compound annual growth rate for the segment to 36% from 30%.
The revised rate implies nearly 5x growth off a roughly $35 billion 2025 base. Bank of America sees Advanced Micro Devices (AMD) as the primary beneficiary, citing what Arya described as the company's "dual leadership" across frequency and core count. The bank also views CPUs as additive to overall system total addressable market and points to near-record GPU rental prices and elevated memory spot prices as signs of a broader compute shortage.
Q2 FY2026 by the numbers
Reported revenue of $11.54 billion for AMD's second fiscal quarter of 2026 beat the $11.35 billion consensus by $190 million, a 50.1% YOY increase. Data Center led the segment split.
| Segment | Q2 FY2026 (reported) | YOY |
|---|---|---|
| Data Center | $6.7bn | +107% |
| Client + Gaming | $3.8bn | +6% |
| Embedded | $977mn | +19% |
| Total revenue | $11.54bn | +50.1% |
Non-GAAP gross margin came in at 56%. Non-GAAP operating income reached $3.1 billion, up 244.9% YOY. Adjusted EBITDA rose 205.2% to $3.3 billion. Adjusted EPS of $1.66 beat the $1.61 Street estimate and represents 245.8% growth from the prior-year quarter.
Guidance, valuation, and the forward read
AMD management guided Q3 FY2026 revenue to approximately $13 billion, plus or minus $300 million, about 41% YOY growth at the midpoint. The company projects server revenue growing more than 80% YOY in the second half of 2026 and more than 70% for full-year 2027. Data Center revenue is expected to more than double YOY in 2027, per the company's own outlook.
Wall Street's consensus puts FY2026 adjusted EPS at $6.44, a projected 96.9% increase. The FY2027 consensus stands at $13.47, implying a further 109.2% rise.
AMD shares carry a market cap of $788.5 billion and trade at 63.88 times forward adjusted earnings and 15.53 times sales, both above the company's five-year historical averages. The stock has gained 184.3% over the past 52 weeks and 140.2% year-to-date.
Bernstein analyst Stacy Rasgon raised his price target to $650 from $525, maintaining a Buy rating. Argus Research analyst Jim Kelleher reiterated Buy and lifted his target to $625 from $450. Among 45 analysts tracked, 36 hold a Strong Buy, two a Moderate Buy, and seven a Hold. The consensus target of $618.98 implies 20.3% upside from current prices. The Street-high target sits at $1,250, implying a 143% gain.