Semiconductor stocks surged Thursday after Bank of America identified agentic AI as a transformative growth catalyst, projecting the global server CPU market will exceed $170 billion by 2030—up from a prior estimate of $125 billion. The revised outlook implies nearly fivefold growth from 2025 to 2030, representing a compound annual growth rate of roughly 37%.
Shares of major chipmakers responded positively: Advanced Micro Devices (AMD) climbed about 6%, Intel gained more than 11%, Arm Holdings rose over 8%, and Nvidia advanced approximately 1.4% in early trading. The rally followed discussions at BofA's Global Technology Conference, where industry executives and customers highlighted surging demand for AI infrastructure.
Agentic AI Expands CPU Role
Analyst Vivek Arya explained that agentic AI—systems capable of planning, reasoning, retrieving information, executing code, and making decisions across complex workflows—represents a powerful demand accelerant for CPUs. Unlike traditional generative AI, which typically responds to a single prompt, agentic AI performs multiple tasks simultaneously, making it well-suited for CPU-based orchestration.
“The emergence of agentic AI expands the CPU opportunity and lifts both x86 incumbents and ARM challengers,” Arya wrote. He noted that many agentic AI functions are latency-sensitive, sequential, and I/O-intensive, characteristics that align better with CPUs than GPUs.
BofA Raises Price Targets Across the Board
Bank of America raised its price target on AMD to $560 from $500, citing stronger expectations for both CPU and GPU demand. The firm also highlighted AMD’s upcoming AI-focused event, where it is expected to showcase its next-generation Venice processor platform.
Arm Holdings received a substantial target increase to $335 from $245, driven by long-term opportunities in chiplet architectures and custom AI computing designs. Intel earned a rare double upgrade to Buy, with a price target of $135, reflecting improving prospects for its CPU business and foundry operations.
Nvidia remains BofA’s top overall semiconductor pick due to its “full-stack AI leadership.” However, the stock has fallen about 7.5% over the past month amid broader tech selloffs tied to rising U.S. interest rates. Investors are increasingly examining Nvidia’s efforts beyond traditional AI chips, including its participation in a $1.4 billion funding round for German robotics company Neura Robotics, announced Wednesday. Neura aims to scale production to several million robots annually by 2030, highlighting Nvidia’s growing focus on physical AI—robots, autonomous vehicles, and other intelligent machines interacting with the physical world.
Qualcomm was kept at Underperform despite an expected AI CPU announcement at its June 24 AI Day, with BofA citing tough competition and limited serviceable addressable market.
Market Context and Broader Implications
The rally comes amid a volatile period for tech stocks. Earlier this week, the Dow dropped 486 points as an AI-led tech selloff intensified, with chip stocks tumbling. The broader market has been grappling with expectations of higher interest rates, which have deflated some of the froth in high-growth sectors. However, BofA’s bullish forecast suggests that agentic AI could provide a sustained tailwind for semiconductor companies, particularly those with strong CPU and GPU portfolios.
For investors, the key takeaway is that the AI opportunity is broadening beyond traditional accelerators. As agentic AI gains traction, companies like AMD, Intel, and Arm—alongside Nvidia—stand to benefit from increased demand for CPUs that can handle complex, multi-step workflows. This shift could also support diversification beyond pure AI plays, as highlighted in recent analysis of stocks with strong fundamentals for 2026.
This article is for informational purposes only and does not constitute financial advice.
