On Nov. 12, when Nvidia (NVDA) confirmed that its CEO, Jensen Huang, had resigned, investors surprisingly didn’t sell every AI chip stock.
In fact, Wall Street piled into Nvidia’s biggest rivals, adding insult to injury. Nvidia stock shed 4.3% to $166.19 on Nov. 12, while Advanced Micro Devices (AMD) surged 5.9% to $585.30, and Broadcom (AVGO) gained 5.5%.
Bank of America made a similar distinction in a note shared with me. Veteran analyst Vivek Arya bumped his AMD price target, cut Nvidia’s, and kept a Buy rating on both.
But perhaps the more revealing number in Arya’s analysis isn’t the flashy new price target, but a massive new forecast for a market that tends to be overshadowed by AI accelerators.
Bank of America’s $700 target starts with a different chip
Arya raised his AMD stock price target to $700 from $650 and slashed Nvidia’s to $280 from $350. At the Nov. 12 close, AMD’s new target implied 19.6% upside.
However, what has him reassessing his outlook on AMD is a substantial bump in his forecast for the server CPU market, which often gets overlooked amid AI GPU headlines.
He estimates the server CPU market could rise to $240 billion by 2030, up from $210 billion in his previous guidance. Interestingly, he expects AI agents to effectively drive that growth.
GPUs handle the heavy computation behind AI models, but CPUs handle work around those models, which means more AI activity drives demand for both kinds of chips.
Arya called AMD his top CPU pick, citing the breadth of its processor lineup, clock speeds, core and thread counts, and better visibility into supply.
Speaking of processors, on Nov. 10, AMD announced general availability of its sixth-generation EPYC server processors, based on Zen 6, and said systems using them were already shipping. In fact, Microsoft Azure and Oracle had also confirmed plans to use the new chips.
AMD has already set a massive bar.
Its data-center sales skyrocketed 97% to $8.5 billion in Q3, with both EPYC CPUs and Instinct GPUs contributing. CEO Lisa Su told analysts on the earnings call that she expects the data-center CPU business to roughly double in 2027, according to Reuters.
Looking ahead, AMD’s Q4 outlook calls for $17 billion in companywide sales and a 55% adjusted gross margin, compared to 56% in Q3, a reminder that there’s still plenty of work to be done on the margins side.
What AMD investors are paying for at $585
The new $700 target recovers $50 of the $70 Arya cut earlier in November.
In that specific move, BofA has lifted its adjusted earnings estimates to $16.95 per share for 2027 and $26.14 per share for 2028, but has lowered the target from $720 to $650 as chip stock pricing multiples contracted.
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AMD’s earnings outlook improved, but investors were paying less for each dollar of expected profit.
Using the prior estimates, AMD’s most recent $585.30 close valued AMD at 34.5 times 2027 earnings or 22.4 times 2028 earnings. At $700, those multiples would rise to 41.3 and 26.8, respectively.
Let’s break that down.
If AMD earns $26.14 in 2028 and investors pay just 22 times that figure, the stock would be worth about $575. At 27 times, it would be worth about $706.
So with the same earnings, we could arrive at very different outcomes. The $700 target is easier to reach if AMD beats that earnings estimate or investors become willing to pay more for its growth.
Nvidia’s CEO exit could open doors, not move orders overnight
Nvidia named CFO Colette Kress interim CEO, and the company expects customer commitments and the product roadmap to continue without interruption.
Arya also pointed to Nvidia’s ramp-up of its own Vera server CPU. And despite cutting his Nvidia target, his price target is still 68.5% higher compared to its most recent closing price, more than he sees for AMD, which has plenty to do with the carnage of late.
The direction of a price target change and the upside it implies are two different things.
Where AMD could benefit is at the next purchasing decision. Meta’s agreement to deploy up to six gigawatts of AMD GPUs shows that customers already had AMD in mind at the highest echelons before Huang resigned.
Nvidia’s Nov. 17 earnings call is the next chance to hear whether Kress sees any change in customer plans.
For AMD, I’d watch a different set of numbers: how quickly EPYC shipments grow, whether Helios systems move into wider deployment, and what happens to margins as volume rises. Those results will determine whether the stock earns $700.
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