Advanced Micro Devices (AMD) has gained about 42% in the past month, according to Yahoo Finance at the time of writing, Friday afternoon, April 17. Meanwhile, the SPDR S&P 500 index (SPY) is up slightly less than 6% in the same period.
AMD is outpacing the S&P 500 by more than 35%. That is impressive, but what is driving these gains?
The company will report earnings on May 5, and the expectations are high.
The sentiment has changed significantly following the stock’s dip after the February earnings report.
At the end of February, AMD expanded its partnership with Meta, and Bank of America reset its forecast for the stock.
The importance of CPUs for the AI data center buildout is growing. And CPUs are AMD’s core strength. Both AMD and Intel have reported a surge in CPU demand, as reported by Tom’s Hardware.
Bank of America analyst Vivek Arya and his team revised their server CPU forecasts, updating their opinion on AMD stock ahead of earnings.
“We believe CPUs are increasingly becoming essential in sequential and latency-sensitive workloads, and are an integral part of overall AI infrastructure,” Arya wrote.
The team expects CPUs to consistently make up an approximately 5% share of the overall AI data center total addressable market (TAM) of approximately $1.4 trillion. They estimate a +21% compound annual growth rate (CAGR) toward a TAM of $70+ billion by 2030, up from approximately $28 billion in 2025.
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Analysts said that the key driver of their server CPU TAM growth is the growing server unit TAM. It is estimated to grow to 25 million units by 2030, up from just approximately 17 million in 2025, for a +8% CAGR.
The team noted that the server CPU market is getting very crowded.
They believe that AMD is the leader in cloud offerings and that, in the near term, it is best positioned with its leading pipeline of current-gen Turin CPUs and the upcoming Venice line.
Analysts said they like AMD’s strong CPU product pipeline and incumbency in cloud server CPUs, as well as the upcoming first 2.0 to 2.5 GW of compute capacity, which includes both GPUs, CPUs, and network interface cards. The buildout is slated for the second half of 2026 at Meta, OpenAI, and others.
The team expects AMD to continue to lead in the cloud while expanding its exposure in the traditional enterprise market, with sales growing to approximately $24 billion by 2030 at approximately 34% market share.
