Citi expects 2030E server CPU TAM to reach about $132B and raises target prices for INTC and AMD

Overview

This Citi US semiconductor report focuses on server CPU market expansion, AI infrastructure demand, and valuation revisions for INTC and AMD. The report builds a server CPU TAM model covering general-purpose CPUs, AI head nodes, and agentic CPU applications, forecasting CPU TAM to increase from $29.3B in 2025 to $131.5B by 2030E, implying a 35% CAGR.

Core views

The core view is that AI-driven data center computing demand will bring about a CPU revival, with agentic CPU applications potentially becoming the largest incremental driver. Citi expects Intel, AMD, and ARM/Others to hold 47%, 34%, and 19% of the server CPU market, respectively, by 2030E. The report is more positive on INTC, believing that the AI CPU cycle, improved foundry execution, ASIC business, and progress with potential customers support a Buy rating; for AMD, it acknowledges the CPU and AI accelerator opportunities, but maintains a Neutral rating due to execution, competition, and customer concentration risks around MI450 and Helios racks.

Analysis framework

The report uses a TAM breakdown, shipment forecasts, market share forecasts, and an SOTP valuation framework. TAM is divided into general-purpose CPUs, AI head nodes, and agentic CPUs; for company valuation, INTC uses a sum-of-the-parts SOTP approach, while AMD is valued by data center GPU/CPU, client, gaming, embedded, and net cash components.

Methodology notes

• market size forecastingTAM model

  server CPU TAM breakdown

  The server CPU opportunity is broken down into general-purpose CPUs, AI head nodes, and agentic CPU applications, with 2030E revenue scale and CAGR estimated separately for each.

• Valuation methodsSOTP

  sum-of-the-parts valuation

  INTC and AMD are valued separately by business segment; AMD's data center GPU/CPU business uses 30x 2028 PE, while client, gaming, and embedded use multiples of 15x, 8x, and 18x, respectively, plus about $33 per share in net cash.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• INTC.US

  Benefits from server CPU TAM expansion, the AI-driven CPU cycle, ASIC business, and potential foundry customers

  Strengths

  Buy rating; target price raised to $130; expected to still hold 47% server CPU share by 2030E; Mount Evans IPU is used by Google and extended to Anthropic; may gain foundry-related opportunities from Apple and Nvidia.

  Weaknesses

  1Q26 server MPU unit share and revenue share both declined quarter-over-quarter; PC and server businesses are highly dependent on IT spending.

  Comparison

  Compared with AMD, Intel currently has a higher share, but AMD and ARM continue to gain share; the report is more positive on Intel's rating.

  Risks

  PC and server demand volatility, competition with AMD, concentration among PC OEM customers, macro cycles, and foundry execution falling short of expectations.

• AMD.US

  Benefits from server CPU share gains, CPU revival, and potential AI accelerator orders

  Strengths

  Target price raised to $460; 1Q26 server MPU unit and revenue share increased; may become a major beneficiary of the CPU revival; according to industry discussions, may win Anthropic as a customer for the MI450 AI accelerator.

  Weaknesses

  Rating remains Neutral; Citi is waiting for the launch and successful validation of MI450 and Helios racks; there are execution, competition, and customer concentration risks.

  Comparison

  Compared with Intel, AMD has a lower share but faster growth; it still needs to compete with NVIDIA in AI GPUs.

  Risks

  MI450 and AI GPU ramp-up falling short of expectations, competition with Intel and NVIDIA, volatility in PC end demand, customer concentration with Sony and Microsoft, and valuation volatility.

Key data

• CPU TAM2025E $29.3B; 2030E $131.5BEquivalent to a 35% CAGR from 2025-2030E.
• 2030E general-purpose CPU TAM$50.9BExpected 20% CAGR, representing 39% of 2030E TAM.
• 2030E AI head nodes TAM$21.1BExpected 21% CAGR, representing 16% of 2030E TAM.
• 2030E agentic CPUs TAM$59.4BExpected 185% CAGR, representing 45% of 2030E TAM.
• server CPU shipments2025E 29.2 million units; 2030E 62.6 million unitsEquivalent to a 16% CAGR.
• 2030E server CPU shareIntel 47%; AMD 34%; ARM/Others 19%Citi expects AMD and ARM to continue gaining share.
• 1Q26 server MPU unit shareIntel 54.9%; AMD 27.4%; ARM 17.7%Intel fell 372bp quarter-over-quarter, AMD rose 228bp quarter-over-quarter, and ARM rose 145bp quarter-over-quarter.
• 1Q26 server MPU revenue shareIntel 53.8%; AMD 46.2%AMD rose 492bp quarter-over-quarter.
• INTC target price$130Raised from $95 to $130 using SOTP valuation.
• AMD target price$460Raised from $358 to $460 using SOTP valuation.
• AMD AI sales forecast2026E $15.1B; 2027E $31.8BYear-over-year growth of 127% and 111%, respectively.

Impact & implications

In terms of investment implications, server CPUs are expanding from traditional general-purpose computing into AI head node and agentic CPU scenarios, potentially enhancing the value of CPUs within AI infrastructure again. INTC's investment thesis is more geared toward the AI CPU cycle, foundry improvements, and ASIC opportunities; AMD's upside comes from CPU share gains, TSMC capacity allocation, and potential MI450 customers, but its rating is constrained by the need to validate next-generation GPU execution.

Risks

• Server CPU demand comes in below expectations.
• AI GPU ramp-up or MI450 execution falls short of expectations.
• Intensifying competition among Intel, AMD, ARM, and NVIDIA leads to fluctuations in market share or margins.
• PC and server end demand is affected by the IT spending cycle.
• Customer concentration risk, including AMD's dependence on Sony, Microsoft, and potential large AI customers, as well as Intel's dependence on PC OEM customers.
• A macroeconomic downturn may affect semiconductor demand and valuations.

What to watch

• Whether AMD announces Anthropic as an MI450 customer at its July Advancing AI day.
• The launch, customer adoption, and execution of AMD MI450 and Helios racks in 2H26.
• Whether Intel formally announces a chip foundry agreement with Apple.
• Whether Intel wins Nvidia as a foundry customer for gaming GPUs.
• Whether server CPU market share continues to shift from Intel to AMD and ARM.
• Whether agentic CPU applications achieve high growth as modeled by Citi.