BofA sees AMD narrowing Nvidia’s chip lead

Bank of America reiterated a Buy rating on AMD on Aug. 4 and set a $620 price objective, arguing that its AI accelerator opportunity is still underappreciated. The bank says AMD’s earnings power could exceed $30 a share by 2030, compared with the $7.62 it expects this year, as the company tries to move from a low single-digit share in a market dominated by Nvidia.

AMD’s latest quarter showed the tension between long-term expectations and near-term concerns. Revenue reached $11.5 billion and adjusted earnings were $1.66 a share, while the stock fell as much as 9% after investors focused on flat margin guidance and higher capital spending tied to AI infrastructure.

BofA points to Helios, AMD’s rack-scale system that bundles GPUs, CPUs, and networking hardware, as a shift from selling components to selling complete AI systems. Meta committed to as much as 6 gigawatts of AMD GPU capacity in a multi-year deal, OpenAI signed a similar 6-gigawatt agreement, and Microsoft and Oracle are expected to deploy Helios systems this year.

The upside depends on demand outgrowing Nvidia’s capacity and customers continuing to diversify suppliers. AMD management estimates the addressable AI compute market at roughly $2 trillion by 2028, including $1.4 trillion from accelerator chips, though BofA flags risks from unprofitable AI lab customers and AMD’s first ramp of a fully integrated system.