Advanced Micro Devices Inc. (AMD) shares fell 7% on Wednesday, even after the chipmaker delivered another quarter of explosive data-center growth.
The problem wasn't simply earnings.
Hours after AMD reported results, Elon Musk handed rival Nvidia Corp. (NVDA) perhaps the strongest endorsement in the AI chip race.
Musk said SpaceX has committed to Nvidia GPUs exclusively because "they are the best."
For AMD investors, the timing was painful.
In a note shared Wednesday, Bank of America semiconductor analyst Vivek Arya told the bank's clients to "ignore the quarterly noise."
His argument comes down to one question: What if investors are judging AMD's AI opportunity about a year too early?
BofA Says AMD's Real AI Test Starts In 2027
AMD's second-quarter numbers weren't weak.
Revenue reached $11.54 billion, 2% above consensus, according to BofA. Data-center sales hit $6.72 billion, up 107% year over year.
AMD also guided third-quarter revenue to roughly $13 billion, slightly above the Street's $12.5 billion expectation.
But those numbers still measure AMD before its most important AI product cycle begins.
"'27 Helios ramp more important than mid-'26 trends," Arya said.
AMD's Helios rack-scale platform is expected to begin ramping in earnest during the fourth quarter before accelerating through 2027.
That distinction matters because Nvidia no longer competes by selling individual GPUs. Its advantage increasingly comes from selling complete AI systems.
Helios is AMD's attempt to fight that battle at the same level.
Arya said the company "continues to execute flawlessly in GPU, agentic CPU and customer traction."
BofA reiterated its Buy rating and $620 price objective, implying nearly 28% upside from where AMD stock traded at the time of this writing.
BofA Just Made A Huge Change To AMD's Earnings Outlook
But the price target isn't the most interesting number. The earnings revisions are.
BofA increased its calendar 2026 AMD earnings estimate just 2%, from $7.50 to $7.62 per share. Its 2027 estimate jumped 20%, from $13.26 to $15.88.
For 2028, BofA lifted its forecast by 34%, from $17.84 to $23.88. That widening gap tells investors where the AMD thesis actually sits.
The bank expects revenue growth to accelerate from 47% in 2026 to 77% in 2027, with annual sales reaching roughly $90 billion. By 2028, revenue could reach $128.3 billion.
The Road To $30-Plus AMD EPS
BofA thinks the opportunity becomes even larger by the end of the decade.
"We believe AMD DC sales could reach ~$170bn by fiscal-year 2030 from just ~$32bn in fiscal-year 2026," Arya said.
That would help push AMD above $30 per share in earnings by 2030, nearly four times BofA's 2026 estimate.
The math depends on AMD capturing a larger share of a rapidly expanding market.
Management estimates the total AI compute market could exceed $2 trillion by 2030, including more than $1.4 trillion for accelerators and $220 billion for server CPUs.
AMD currently holds just 7%–8% of the AI GPU market and roughly 25%–30% of server CPUs, according to BofA.
That means AMD doesn't need to dethrone Nvidia. It needs to gain share while the entire market expands.
