Advanced Micro Devices, Inc. (NASDAQ:AMD) may be gearing up for its most explosive growth yet, with artificial intelligence poised to drive a multi-year earnings boom.
That's based on a new forecast from Bank of America, which sees AMD's earnings per share (EPS) climbing to as high as $18 by 2030—more than five times its current annual EPS—driven by its growing footprint in the artificial intelligence graphics chip market.
Ahead of AMD's Analyst Day event scheduled for Tuesday, Nov. 11, in New York City, Bank of America analyst Vivek Arya maintained a Buy rating and a $300 price target on the stock. That suggests a nearly 30% upside from AMD's current share price.
AI GPU Share, Sales Targets In Focus
Arya expects AMD to raise its estimate for the total addressable market in AI accelerators—chips that power machine learning models—from more than $500 billion to a range of $750 billion to $850 billion.
Bank of America believes AMD will aim to capture a double-digit percentage of this market, particularly in merchant graphics chips, which could mean $55 billion to $65 billion in annual sales by the end of the decade.
The estimate assumes AMD ships about 2 gigawatts of AI compute capacity to OpenAI by 2030, as part of a broader 6 gigawatt buildout, and includes the effect of any stock dilution related to that deal.
“We see potential $15-18 EPS Power by calendar year 2030, assuming a full 6GW AI deployment by OpenAI and related dilution,” Arya said.
Profitability to Improve As Scale Kicks In
While AMD's gross margin—the percentage of revenue left after manufacturing costs—may come in slightly lower than past targets, around 53% to 55%, Arya sees efficiency improving as the company scales its AI business.
He expects AMD’s operating expenses to decline as a percentage of revenue, from 30% to around 21% to 22%, allowing operating margins to recover into the low- to mid-30% range.
Back in 2022, AMD's Analyst Day targeted 20% annual revenue growth, over 57% gross margin, and mid-30% operating margins. Still, those projections were knocked off course by weak demand across personal computers, game consoles, and server chips in 2023 and 2024.
Execution Still A Key Risk For AMD
Bank of America warned that execution will be critical, particularly as AMD prepares to launch its MI400 "Helios" rack-scale AI system in the second half of 2026. This will be the company's first attempt to ship a fully integrated AI system at scale—something Nvidia Corporation (NASDAQ:NVDA) has already done, now moving into its third generation of rack systems.
Arya highlighted Nvidia's earlier delays and profit issues with its Blackwell rack systems in 2024, suggesting AMD must avoid similar missteps.
Another area of concern is AMD's dependence on a few large customers, especially OpenAI and Oracle. The OpenAI agreement includes equity and warrant structures, raising questions about the long-term value of the deal. Arya said that broadening the customer base will be essential to support sustained growth.
He also flagged AMD's lack of a clear networking strategy. Unlike Nvidia, which has built strong in-house systems using InfiniBand and NVLink, AMD is still lagging in interconnect technologies and has yet to fully define its role in initiatives like the UALink consortium.
"We flag AMD's lack of an effective networking strategy (switching, UALink ecosystem, etc.)," Arya wrote.
Valuation Still Attractive, But Under-Owned
Despite its AI push, AMD's stock is still trading at what Arya considers a discount to competitors. The company trades at 25 times estimated 2027 earnings, with a price-to-earnings-to-growth (PEG) ratio of just 0.6, based on expected annual earnings growth of 41% from 2025 to 2028.
That compares to Nvidia's PEG of 0.9 and Broadcom Inc. (NASDAQ:AVGO) at 1.1.
Arya also highlighted that AMD remains under-owned by institutional investors, with only 24% of S&P 500 funds holding the stock as of October, and just 0.19 times portfolio weighting, compared to 1.13x for Nvidia and 1.60x for Broadcom.
Bottom Line: A Critical Analyst Day For AMD
Bank of America views AMD's upcoming Analyst Day as a potential turning point. With a multi-billion-dollar AI chip business in sight and earnings possibly rising to $18 per share by the end of the decade, Arya sees a chance for AMD to reframe the narrative after a difficult two years.
But execution will be key. Investors will be watching for signs that AMD can scale AI infrastructure, diversify its customer base, and close the gap with Nvidia's tightly integrated hardware and software stack.
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