Advanced Micro Devices (AMD) and Arm Holdings could emerge as major beneficiaries of the next phase of artificial intelligence infrastructure growth as enterprises increasingly deploy standalone CPU racks to support agentic AI workloads, according to a new UBS analyst report.
The investment bank raised its outlook for both companies, citing growing demand for traditional computing resources alongside AI accelerators. As agentic AI systems become more widespread, businesses are expected to require additional CPU capacity to manage data processing, coordination tasks, and complex workloads that complement AI models.
UBS believes AMD is particularly well positioned to capture a larger share of this expanding market. The company’s advantages in core density, multithreading performance, and its established x86 software ecosystem could make its processors attractive for enterprise AI deployments. The report noted that conventional computing workloads are becoming increasingly important as organizations integrate agentic AI applications into their operations.
The firm also suggested that Intel could benefit from this trend if it successfully improves its product roadmap and manufacturing execution. However, AMD currently appears to hold a stronger competitive position within the evolving CPU market.
UBS significantly increased its price target for AMD to $670, up from $455. The bank also raised its long-term CPU revenue forecasts, projecting AMD's CPU business could generate approximately $23 billion in revenue by 2027 and $29 billion by 2028, compared with previous estimates of $21 billion and $27 billion, respectively.
Arm Holdings also received a substantial target increase, with UBS raising its price target to $470 from $260. The firm expects Arm-based architectures to account for nearly 70% of head-node deployments by 2030, reflecting growing adoption of Arm processors in AI infrastructure and data centers.
In addition, UBS increased its estimates for Arm's standalone CPU revenue opportunity. The report highlighted that Arm could benefit from higher royalty payments as processor designs continue to incorporate greater numbers of computing cores, expanding the value of its licensing model.
As enterprises move beyond GPU-focused AI infrastructure and build more balanced computing environments, both AMD and Arm appear positioned to benefit from rising demand for CPU technologies that support the next generation of agentic AI applications.
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