Advanced Micro Devices (AMD) shares rose on Wednesday after Chief Financial Officer Jean Hu outlined an expanding artificial intelligence opportunity and said the company expects its data center business to double in 2027.
The bullish outlook has also prompted analysts to raise their price targets, while Bank of America data showed increasing institutional ownership of AMD and other semiconductor stocks.
AMD sees $3 trillion AI opportunity
AMD Chief Financial Officer Jean Hu now estimates its AI-related total addressable market could reach $3 trillion by 2030, reflecting growing demand for GPUs, server CPUs and system-level AI products.
The company expects its data center business to reach about $70 billion in sales in 2027, roughly double its current level.
AI GPUs are expected to contribute in the low-$40 billion range, with server CPUs accounting for the remainder, according to the information presented at the Citi Global TMT Conference.
AMD also expects continued growth from its next-generation products.
The MI450 AI processor remains primarily a fourth-quarter 2026 opportunity, according to Raymond James analyst Simon Leopold, who said supply-chain checks supported the expected timing of the rollout.
“We came away incrementally constructive on AMD’s CPU opportunity,” Leopold said in a client note.
He also said suppliers were qualifying components specifically for AMD AI platforms, indicating broader investment around the company’s rack-scale systems.
CLSA raised its AMD price target to $710 from $575 while maintaining an Outperform rating.
The firm also increased its fiscal 2027 and 2028 earnings-per-share estimates by 25% to 29%, based on expectations that AMD could ship more MI-455 GPUs at higher prices.
Institutional investors increase AMD exposure
AMD’s outlook comes as institutional investors continue to increase their exposure to the semiconductor industry.
Bank of America said Nvidia and Broadcom have the broadest ownership among active US fund managers, while AMD and Micron have also recorded significant increases.
AMD was owned by 51% of funds, according to Bank of America’s August Equity Strategy data.
Semiconductor industry exposure stood at 1.15 times the benchmark, up from 1.08 times in May.
Analyst Vivek Arya said ownership has become increasingly concentrated in compute, memory and semiconductor equipment stocks, with ownership levels of 74%, 43% and 40%, respectively.
Memory stocks recorded the largest monthly increase, while semiconductor equipment also saw a notable rise in fund ownership.
Arya said AMD’s ownership increased by 7% month over month and 75% quarter over quarter on a relative-weight basis. Intel ownership also increased, although it remained well below the most widely held semiconductor names.
AMD faces a strong but competitive AI market
AMD’s gains reflect growing investor expectations around its role in the AI infrastructure buildout. The company’s data center expansion, upcoming MI450 launch and server CPU growth are key parts of that outlook.
Leopold said supply-chain checks found nothing that would materially accelerate MI450 revenue into earlier periods, keeping the fourth-quarter 2026 ramp as the main opportunity.
At the same time, AMD is competing with Nvidia and Broadcom for institutional attention as fund managers concentrate their semiconductor exposure in areas linked to AI computing, memory, and equipment.
Wall Street’s overall stance toward AMD remains constructive, with 28 buy ratings and 6 hold ratings according to TipRanks data.
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