Invezz
21 May 2026, 10:49 UTC · 10h ago
2 chip stocks BofA says will win next phase of the AI revolution
Source · https://invezz.com/news/2026/05/21/2-chip-stocks-bofa-says-will-win-next-phase-of-the-ai-revolution/
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Invezz
21 May 2026, 10:49 UTC · 10h ago
Source · https://invezz.com/news/2026/05/21/2-chip-stocks-bofa-says-will-win-next-phase-of-the-ai-revolution/
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Bank of America projects the server CPU market will grow from $43 billion in 2026 to $125 billion by 2030, a 31% CAGR. — This represents a massive structural expansion of the addressable market for semiconductor companies beyond just GPU sales.
+0.80The emergence of 'agentic AI' is shifting the compute requirement to be more CPU-intensive, as CPUs act as the 'control plane' for orchestrating complex workflows. — This changes the investment thesis for AI infrastructure, diversifying risk and demand away from a pure GPU-centric playbook.
+0.60BofA raised its price target for Nvidia to $320 and AMD to $500, citing their positions in the CPU-heavy leg of AI buildout. — Direct upward valuation adjustments from a major investment bank typically trigger positive short-term price action for the named stocks.
+0.50Nvidia's upcoming Vera Rubin platform, expected in 2H 2026, may feature a 1:1 CPU-to-GPU ratio in its pods. — Provides a concrete near-term product catalyst and evidence of increased CPU attachment rates per GPU sale.
+0.40Nvidia faces potential gross margin compression due to rising HBM costs and competition from custom hyperscaler silicon. — Margin pressure is a key fundamental risk that could offset the revenue growth from new AI platforms.
-0.30BofA expects AMD's AI market share to move from roughly 6% in 2026 to double digits by 2030. — Suggests a long-term shift in the competitive landscape where AMD successfully erodes Nvidia's monopoly in AI accelerators.
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Model heads
BofA describes AMD as a top compute pick with a target raise to $500 and potential for significant AI market share gains.
BofA maintains a Buy rating and raised price target, citing the Vera Rubin platform as a catalyst for CPU and GPU demand.