Next week AMD Analyst Day: Market focuses on AI demand realization and growth inflection point in the second half of 2026

Recently, analysts at Bank of America reiterated their buy rating on AMD, emphasizing that the company's core investment logic should focus on the significant growth inflection point in the second half of 2026. According to Wind Trading Desk, Bank of America analysts stated in a report on November 5 that AMD is expected to raise its addressable market size for AI from the previous forecast of $500 billion in 2028 to over $1 trillion by 2030 at the upcoming Analyst Day on November 11. This adjustment will provide a more solid support for the company's long-term growth prospects. With the launch of the rack-level MI400X product and the implementation of the OpenAI collaboration project, AMD's earnings per share are expected to soar from less than $4 in 2025 to about $10 in 2027, achieving more than double growth. If the OpenAI project is fully implemented, data center GPU (MI) sales are expected to surge from the current year's $6.2-6.4 billion to about $30 billion by 2027, nearly a fivefold increase. Data Center GPU Business Enters Explosive Growth Phase In the previous Q3 financial report, data center GPUs became the biggest highlight of AMD's growth. The MI355X quickly gained recognition from multiple customers in the third quarter and ramped up production, driving approximately 150% quarter-over-quarter growth in GPU revenue after excluding the impact of MI308. More importantly, AMD's supply chain preparations for MI450/Helios in the second half of 2026 and beyond are progressing smoothly. Customer interest has significantly increased: a 6GW capacity agreement was signed with OpenAI, OCI committed to deploying at least 50,000 MI450 GPUs starting in Q3 2026, and Meta showcased a custom rack system based on MI450 Helios at the OCP conference. JP Morgan believes that these developments lay the foundation for AMD to achieve its previously reiterated goal of "data center GPU revenue reaching hundreds of billions of dollars by 2027." Rack-Level Architecture and OpenAI Collaboration AMD is optimistic about the progress of the rack-level MI400X product, customer diversification, supply chain coordination, and the software platform ROCm, all of which are preparations for the launch of the OpenAI project in the second half of 2026. Bank of America analysts estimate that if AMD can execute the full 6GW order from OpenAI, the long-term earnings per share potential could exceed $15. Analysts emphasize that AMD currently holds about 3-4% market share in the rapidly growing AI market, and the company's true growth trend will depend on the execution of rack-level architecture and the expansion of market share. The data center GPU business is expected to grow from approximately $6.4 billion this year to $26.771 billion by 2027. Gross Margin Pressure and Intense Competition However, Bank of America also emphasizes that investors need to pay attention to several key risks. First, competition with larger rivals such as NVIDIA and Broadcom is not easy AMD's R&D spending has significantly increased as the company integrates recent acquisitions. Spending is expected to remain high, with AMD continuing to prioritize market share growth over profit maximization in the short to medium term. Gross margin may face pressure as the product mix shifts towards rack-level systems, which have higher input costs (wafers, HBM). At the analyst day, gross margin may be guided to just above 50%. Additionally, some investors may adopt a wait-and-see approach until they see more evidence of AMD's execution capabilities in rack-level products and customer diversification, especially beyond OpenAI, which is already served by other large competitors.