Investing.com -- Citi lifted its price targets on Intel and AMD and introduced a new server CPU total addressable market (TAM) model that forecasts the segment could grow by 35% from $29.3 billion in 2025 to $131.5 billion by 2030, driven largely by surging demand for agentic AI applications.

The bank’s model breaks the CPU market into three segments: general-purpose CPUs, AI head nodes, and agentic CPU applications.

General-purpose CPUs are expected to grow at a 20% compound annual growth rate (CAGR) to $50.9 billion by 2030, AI head nodes at a 21% CAGR to $21.1 billion, and agentic CPUs at a 185% CAGR to $59.4 billion, making it by far the fastest-growing category and representing 45% of the total market by the end of the decade.

For context, ARM had previously forecast a $100 billion TAM by 2030 and AMD a $120 billion TAM, both below Citi’s new estimate.

Citi expects Intel to hold 47% of the CPU market by 2030, AMD 34%, and ARM and others the remaining 19%.

The bank raised its Intel price target to $130 and lifted its data center sales estimates to reflect the new CPU model and flagged potential additional upside from Intel’s ASIC business, specifically its Mount Evans IPU, which is used by Google and extends to Anthropic.

AMD’s price objective was also hiked to $460, also driven by updated data center estimates.

“We believe AMD has won Anthropic as a customer for MI450 AI accelerator, based on our discussions with industry contacts, and expect AMD to announce it at Advancing AI day in July,” Citi analysts wrote.

The chipmaker "could be the primary beneficiary of the CPU renaissance given its performance leadership and capacity allocation at TSMC,” they added.

“While we are constructive on AMD’s CPU opportunity on agentic AI demand, we await the release and success of its next-gen GPU product MI450 and Helios racks.”