AMD gets bullish pre-earnings call from Lynx as server CPU demand accelerates

AMD shares may have fallen sharply over the past month, but KC Rajkumar and his team at LYNX Equity Strategies believe expectations have reset enough to make the chipmaker attractive heading into its earnings report, highlighting accelerating demand for its next-generation server CPUs and improving momentum in its AI infrastructure business.

In a note ahead of the earnings call, Rajkumar and his team said they had shifted to a positive stance on AMD, reversing their negative view from the previous quarter. They see genuine acceleration in demand for AMD’s Venice server CPUs, driven by both traditional data center workloads and the growing use of AI agents.

Demand for Venice, a 192-core processor built on a 2-nanometer process, is particularly strong worldwide, LYNX said, pointing to limited competition from Intel. The team would not be surprised if AMD management signaled that its previously outlined 70% server CPU growth outlook for 2027 could prove conservative.

The emergence of agentic AI could provide an additional growth driver for AMD’s CPU business. While much of the market’s attention has focused on demand for AI accelerators, increasingly complex AI workloads could also boost demand for server processors as companies deploy autonomous agents and expand their computing infrastructure.

LYNX also sees progress in AMD’s broader AI ambitions, noting that its Helios rack-scale AI platform has started shipping after several quarters of discussion. Confirmation from management on the earnings call would be a positive signal for the company’s ability to execute on its AI infrastructure roadmap.

The shift in sentiment comes after a roughly 30% decline in AMD shares since last month. Rajkumar’s team believes expectations for AI GPU revenue in 2027 and 2028 may have fallen sufficiently as investors reassess spending plans at the two frontier AI labs, both of which AMD has exposure to.

Meanwhile, concerns about AMD’s client business may already be reflected in the stock following Intel’s disappointing results last week.

The upcoming Anthropic IPO remains a potential overhang, however, as investors weigh the funding requirements and future spending plans of major AI companies.

Overall, Rajkumar and his team said they like AMD shares heading into the earnings report at current levels, seeing a more favorable risk-reward profile after the recent pullback. 

“We like the stock into print at current levels,” Rajkumar and his team said.