AMD controls a nice chunk of the server CPU market

Advanced Micro Devices (AMD -0.49%) stock has more than doubled in 2026. That’s not surprising, as the chip designer’s growth rate has been robust due to the improving demand for its server processors and its growing influence in the data center graphics card market.

The good news for AMD stock investors is that the company has been consistently gaining share in a fast-growing niche of the artificial intelligence (AI) chip space — server central processing units (CPUs). The shift in AI data center compute from training to inference has sparked solid demand for server CPUs. As a result, AMD expects the total addressable market (TAM) for server CPUs to reach $220 billion in 2030, with a compound annual growth rate (CAGR) of 50% through the end of the decade.

More importantly, AMD is in a terrific position to make the most of this massive opportunity.

AMD controls a nice chunk of the server CPU market

According to Mercury Research, AMD’s unit share of the server CPU market increased by 7.2 percentage points year over year in Q2 to 34.5%. The semiconductor specialist’s impressive growth came at Intel‘s expense.

The research firm notes that AMD’s actual unit share is around 46.4%, as Intel also includes edge and networking processors in its data center and AI (DCAI) business segment. So, AMD’s Epyc server processors are giving Intel’s Xeon CPUs a run for their money. AMD’s share gains in Q2 explain why its data center segment revenue increased 107% year over year to $6.7 billion.  

Intel’s DCAI revenue, on the other hand, was up by 59% from the year-ago quarter to $6.3 billion. AMD, therefore, seems to be outperforming Intel by a much bigger margin when their respective server CPU businesses are considered. Also, the significantly larger jump in AMD’s data center business last quarter suggests that it is enjoying greater pricing power.

This trend has been seen in the past as well, with AMD’s server CPU revenue share reportedly landing at 46% in Q1, while its unit share was closer to 33%. As such, AMD could be controlling around half of the server CPU market’s revenue share in Q2.

I won’t be surprised to see AMD gaining a bigger share of this space in the future due to its product development moves. But even if AMD maintains its 50% revenue share of server CPUs in 2030, its revenue from this segment could jump to $110 billion (based on the $220 billion TAM estimate noted earlier).

That’s a pretty big number when we consider that AMD’s data center segment has delivered $12.5 billion in revenue in the first six months of 2026, translating into an annual revenue run rate of $25 billion. So, server CPUs alone could boost AMD’s data center revenue by more than 4x by 2030. However, the overall figure is likely much larger, given that it also sells graphics processing units (GPUs) for AI data centers.

The long-term growth prospects point to multibagger returns

The sunny prospects of the server CPU market explain why it isn’t too late to buy this semiconductor stock, even though it trades at an expensive 64 times forward earnings. Analysts are forecasting an 81% increase in AMD’s earnings per share in 2026 to $7.57, followed by a larger increase next year.

AMD EPS Estimates for Current Fiscal Year data by YCharts

What’s more, AMD’s earnings are anticipated to increase by 40% in 2028. However, don’t be surprised to see the company doing better than that, as analysts have significantly increased their long-term earnings growth expectations from the company following its Q2 results.

AMD EPS LT Growth Estimates data by YCharts

Assuming AMD’s earnings increase at 66% a year in 2029 and 2030, in line with the long-term consensus estimate, it could report earnings per share of $59.85 in 2030. Even if AMD trades at 30 times earnings in 2030, less than half its forward earnings multiple, its stock price could jump to $1,795. That’s a potential jump of 3.9x in this AI stock.

AMD has a market cap of $750 million. So, the potential upside assumed above would be enough to send this high-flying stock well into the $2 trillion market cap club, and quite close to the $3 trillion mark. All this makes AMD a top growth stock to buy right now as it can become a multibagger over the long run.