AMD Could See EPS Upside By 2027 Despite Nvidia's Over 80% Market Share: Analyst

Bank of America Securities analyst Vivek Arya maintained a Buy rating on Advanced Micro Devices, Inc AMD with a price target of $130 on Tuesday.

The company benefits from continued Intel Corp INTC CPU share gains in server and PC, a rising tide in AI with higher content from upcoming rack-scale pipeline, along with related Middle East $10 billion multi-year contracts, and cyclical recovery, the analyst noted.

Arya’s segment analysis shows:

• EPS power of $6.44 and $8.52 in the calendar year 2026 and 2027, or 15% and 20% above the Street consensus
• A breadth of ownership across large-cap US active fund managers falling to only ~23% (versus May 2024 peak of 40%+ ownership)
• Relative weightage versus SPX of only 0.2 times (versus a peak of 0.8 times year-on-year), as per the analyst’s BofA strategy data.

Valuation at just 20 times and 16 times PE on current calendar year 2026 and 2027 consensus (or 18 times and 13 times PE on Arya’s EPS power scenario) seems too compelling for a high-quality compute franchise with consistent management execution capable of growing topline 20%+ and adjusted EPS 30%+ for the next few years as per Arya.

Also Read: AMD Unveils Powerful New AI, Gaming Chips At Computex To Challenge Nvidia

The analyst also flagged AMD’s recent $6 billion addition to its buyback program.

Even though Arya expects Nvidia Corp NVDA (80%+ share) and custom chips (10-15% share) to dominate, he noted AMD could be a credible 3%-4% share of the over $300 billion-$400 billion TAM in AI accelerator.

He said many customers have significant internal workloads and compute requirements for internal teams, and AMD can play an essential role.

Arya noted that the company’s recent acquisitions of rack-scale systems and improved software position it well, and it has received several public recognitions at Oracle Corp ORCL, xAI, and others.

He expects AMD to showcase an impressive set of partners and AI pipeline across accelerators, systems, software, CPU, and networking at its upcoming June 12 AI event.

Overall, Arya noted potential upside in each of the following end markets Data Center CPU, Data Center GPU, Client/PC CPU, Gaming Consoles, and Embedded for an aggregate sales upside of ~$6.6 billion by calendar year 2027.

Price Action: AMD stock traded higher by 1.76% to $115.46 at Wednesday’s last check.

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