BofA lifts server CPU TAM to $210bn+ on the rise of AI agents

Bank of America has increased its outlook for the server CPU market, asserting that the growing trend of AI agents is broadening the potential for central processing units in data centers. Analyst Vivek Arya has raised the bank's 2030 server CPU total addressable market (TAM) to over $210 billion, up from approximately $170 billion. This forecast comes in the wake of strong second-quarter earnings and rising demand for AI compute and memory.

According to BofA, the new figure represents nearly five times the growth from the roughly $35 billion level seen in 2025, with the market now projected to expand at a 36% compound annual rate, compared to the previous 30% expectation. The analyst's call highlights a shift in the balance between CPUs and GPUs. BofA notes that AI agents are driving a change in the CPU-to-GPU ratio, moving from about 1:4 during the training era to roughly 1:1 for agentic AI, as CPUs take on the role of orchestration control planes.

As a result of this shift, Bank of America now anticipates CPUs will account for around 10% of the overall $2.2 trillion data center systems market by 2030, up from roughly 7% during the training era. The firm believes the primary debate is centered around whether CPUs are substituting or expanding within the overall system TAM. BofA points to near-record GPU rental and memory spot prices as evidence of a broader compute shortage that likely extends to CPUs as well.

In terms of recommendations, BofA has AMD as its top CPU pick, citing dual leadership across frequency and core count. The analyst also maintains Nvidia as its overall sector top pick. Intel's foundry optionality is highlighted by BofA, while Arm remains the fastest share gainer in the sector.