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

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Recently, Bank of America Securities reiterated a “Buy” rating on AMD, emphasizing that the company’s core investment logic should focus on the major growth inflection point in the second half of 2026.

According to Chasing Wind Trading Desk, a Bank of America analyst said in a report on November 5 that at the upcoming Analyst Day on November 11, AMD is expected to raise its addressable AI market size estimate, increasing it from the previously forecast $500 billion in 2028 to over $1 trillion in 2030. This adjustment will provide stronger support for AMD’s long-term growth outlook.

With the launch of rack-level MI400X products and the implementation of the OpenAI cooperation project, AMD's earnings per share are projected to soar from less than $4 in 2025 to about $10 in 2027, more than doubling. If the OpenAI project is fully rolled out, datacenter GPU (MI) sales could surge from the current $6.2-6.4 billion to about $30 billion in 2027, a nearly fivefold increase.

Datacenter GPU Business Enters Boom Period

In its previous Q3 earnings report, datacenter GPUs became AMD's biggest growth highlight. The MI355X quickly gained recognition from multiple customers in Q3 and rapidly scaled up, driving about 150% quarter-on-quarter growth in GPU revenue in the second half of the year after excluding the impact of MI308.

More importantly, AMD's supply chain preparations for MI450/Helios for the second half of 2026 and beyond are progressing smoothly. Customer interest has significantly increased: an agreement with OpenAI for 6GW capacity, OCI’s commitment to deploy at least 50,000 MI450 GPUs starting Q3 2026, and Meta’s demonstration at the OCP Conference of a custom rack system based on MI450 Helios.

J.P. Morgan believes these developments lay the foundation for AMD to achieve its previously reiterated goal of “datacenter GPU revenue reaching tens of billions of dollars by 2027.”

Rack-Level Architecture and Collaboration with OpenAI

AMD is optimistic about the progress of rack-level MI400X products, customer diversification, supply chain coordination, and the ROCm software platform, all of which are preparations for the start of the OpenAI project in the second half of 2026.

BofA analysts estimate that if AMD can execute OpenAI’s full 6GW order, the long-term potential for earnings per share could exceed $15.

Analysts emphasized that AMD currently has a ~3-4% share in the rapidly growing AI market, and the company’s true growth trajectory will be based on the execution of rack-level architecture and market share expansion. Datacenter GPU business is expected to grow from about $6.4 billion this year to $26.771 billion in 2027.

Gross Margin Pressure and Intense Competition

However, Bank of America also emphasized several key risks investors should focus on.

First, competition with larger rivals like Nvidia and Broadcom will not be easy.

AMD's R&D spending has already increased significantly, due to integrating recent acquisitions. Expenses are expected to remain high, and in the short/medium term, AMD will continue to prioritize market share growth over maximizing profit margins.

Gross margins may come under pressure as the product mix shifts toward rack-level systems, which have higher input costs (wafers, HBM).

At Analyst Day, guidance may indicate gross margins just above 50%. Moreover, some investors may remain on the sidelines until they see more evidence of AMD’s execution capabilities and customer diversification for rack-level products, especially beyond OpenAI, which is already being served by other major competitors.

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