Advanced Micro Devices (AMD) and Arm Holdings are positioned to outpace the market as artificial‑intelligence providers increasingly adopt central processing units (CPUs) and other specialised hardware for new AI agents, according to UBS. The Swiss investment bank maintains a buy rating on both chipmakers and has raised its 12‑month price targets: AMD to $670 from $470, implying about 29% upside from Tuesday’s close, and Arm to $455 from $260, roughly a 28% premium to the last close.
“We raise estimates for AMD and Arm as key beneficiaries of standalone CPU and head‑node deployments,” UBS analyst Timothy Arcuri wrote in a client note. “We do see accelerating traction in standalone CPU racks with the architectural split… playing out.”
CPU demand has surged with the rise of agentic AI—systems designed to operate autonomously. The shift to using CPUs alongside traditional graphics processing units has driven substantial gains for both companies. Over the past three months, AMD’s share price has risen about 153%, while Arm’s stock has jumped roughly 171%.
Wider CPU adoption should continue to favour AMD, which designs and manufactures its own processors, thanks to its advantage in core count, multithreading, and the well‑established x86 software ecosystem that now underpins many agentic‑AI workloads, Arcuri noted.
The growing prominence of CPUs in AI also benefits Arm, a newer entrant that went public in September 2023. “Arm’s core competency lies in latency and efficiency—attributes that align well with hyperscaler requirements,” Arcuri added.
UBS’s bullish outlook aligns with broader Wall Street sentiment. Of 53 analysts covering AMD, 45 assign a buy or strong‑buy rating (LSEG data). Arm enjoys buy or strong‑buy ratings from 25 of the 40 analysts who follow the stock.
