Agentic artificial intelligence (AI) has come to consumers. Anthropic may have been one of the first AI labs to develop popular AI agents in the form of Claude Code and Claude Cowork, but Meta Platforms (META +0.31%) has found a hit with consumers as its Muse AI app sets new download records. OpenAI was quick to respond with its own consumer agent, Dots.
Agentic AI requires much more computing power than a simple chatbot or other large language model (LLM) interfaces. It's continuously running in the background, looking to close open tasks or update ongoing tasks, all with minimal human intervention. That stands to benefit all semiconductor stocks, but there's one chipmaker in particular that could see outsize benefit from the growth of agentic AI: Advanced Micro Devices (AMD -3.52%). Select Wall Street analysts see plenty of upside left for the chipmaker, with some recent upgrades for the trillion-dollar stock.
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Agentic AI could be huge for this chipmaker
The compute needs for agentic AI are a bit different than what it takes for standard LLM inference or training. For agentic AI to function well, it needs chips that can orchestrate models and provide step-by-step instructions for what to do next. That's a process best handled by a CPU (central processing unit), not by a GPU (graphics processing unit) or another specialized chip.
AMD is the leading data center CPU maker, overtaking Intel in 2024. That lead could continue to expand, as AMD is capable of combining CPUs with GPUs into a complete solution. Meta signed a deal with AMD earlier this year that spans both its GPUs and CPUs, as well as its rack-scale systems that combine both into a single unit, along with storage and networking equipment.
AMD Advanced Micro Devices
NASDAQ · As of 2:41 PM ET 10/15/26
AMD recently released a CPU-only rack, Helion, designed specifically for agentic AI infrastructure. The move could help its partners quickly scale up its CPU servers to match their needs for agentic AI.
AMD's push to sell more rackscale systems is seen as a catalyst for its growth. BNP Paribas analyst Karl Ackerman cited its full-stack across AI data center needs in his note on AMD earlier this month, while raising his price target to $960, upside of almost 60% for the stock from a recent price of $606. Citigroup analyst Atif Malik points to its close relationship with Meta and the success of Muse as signs of more growth to come. He raised his price target to $800. Mizuho analysts also see agentic AI driving data center CPU demand to the benefit of AMD. They put a price target of $705 on the stock.
Is the stock a buy?
Sell-side analysts can be an optimistic bunch, and it's best for investors to do their own homework and analyze the future opportunities and expectations for a company before buying a stock.
The growth opportunity for AMD is vast, especially as the combination of proficient CPUs and GPUs in a rackscale system becomes more appealing in the agentic AI era. Of course, it's not the only company competing in the sector. Nvidia (NVDA -1.91%) also makes rackscale solutions, and while its CPUs might not be on the same level as AMD's, its GPUs are best in class -- and the workhorse of AI data centers. Still, AMD should be able to maintain a healthy market share thanks to its CPUs and buyers' need to maintain a secondary source of GPUs to hedge against Nvidia in price negotiations.
That's pushed the stock price 180% higher so far this year, taking its total market cap above $1 trillion. Its price-to-earnings (P/E) ratio now stands at about 77 times forward earnings expectations. Despite the strong earnings growth forecasts, the stock trades at about 25 times estimated fiscal 2028 earnings. If you think analysts are still lowballing the opportunity ahead for AMD thanks to agentic AI, the stock could be a great value at the current price despite the premium price tag. On the other hand, expectations for the company are already high, and that's reflected in its stock price. Other chipmakers trade at much more attractive valuations, even with their own strong growth outlooks.
