AMD Could See EPS Upside By 2027 Despite Nvidia's Over 80% Market Share: Analyst

Core Viewpoint - Bank of America Securities analyst Vivek Arya maintains a Buy rating on Advanced Micro Devices, Inc (AMD) with a price target of $130, highlighting the company's growth potential driven by market share gains from Intel, AI advancements, and significant contracts in the Middle East [1] Group 1: Market Position and Growth Potential - AMD is expected to gain a credible 3%-4% share of the over $300 billion-$400 billion total addressable market (TAM) in AI accelerators, despite Nvidia's dominance [2] - The company is projected to grow its topline by over 20% and adjusted EPS by over 30% in the coming years, supported by a valuation of 20 times and 16 times PE for 2026 and 2027 [1][5] Group 2: Financial Strategies and Performance - AMD has recently added $6 billion to its buyback program, indicating strong financial management and commitment to shareholder value [2] - The expected EPS for AMD is $6.44 and $8.52 for the calendar years 2026 and 2027, which is 15% and 20% above the Street consensus [5] Group 3: Product and Market Development - Recent acquisitions in rack-scale systems and improved software position AMD favorably in the market, with recognition from major companies like Oracle and xAI [3] - Arya anticipates AMD will showcase a robust AI pipeline and partnerships at its upcoming AI event on June 12 [3] Group 4: Sales Upside and Market Segments - Potential sales upside across various segments, including Data Center CPU, Data Center GPU, Client/PC CPU, Gaming Consoles, and Embedded, could aggregate to approximately $6.6 billion by 2027 [4]