CPU Renaissance: ARM, Intel, AMD May Reach Trillion-Dollar Valuation

Research firm Evercore ISI noted in its recent report that the evolution of AI workloads is triggering a "CPU renaissance." In the past, for every CPU in the training phase of large language models (LLM), it was required to pair with 4 to 8 GPUs; as we enter the inference phase, this ratio has narrowed to 1:2; and in intelligent agent AI scenarios, the CPU-to-GPU ratio may further flip to 2:1, 4:1, or even 10:1.

With the continuous improvement of the CPU/GPU ratio, the total addressable market (TAM) for AI server CPUs is substantial:

At a 1:1 ratio, it is approximately $111 billion, and it could rise to $448 billion at a 4:1 ratio.

Considering the traditional server market, the institute expects the overall server CPU market size to reach $164 billion, $275 billion, and $498 billion under three scenarios, respectively, which is a growth of up to 5 times compared to the base of about $30 billion in 2025.

The management of AMD also stated recently that the annual growth rate of the server CPU market could exceed 35%, with the market size expected to surpass $120 billion by 2030, doubling from the estimated $60 billion at the end of 2025.

Revaluation of the Big Three

ARM: Racing to $1 Trillion

Evercore ISI expects ARM's physical chip revenue to reach $49 billion/$79 billion under base/bull scenarios, with corresponding EPS of $21/$40 and target market capitalization of $520 billion/$1 trillion.

The institute believes that ARM's instruction set architecture will gain a larger share of the incremental server CPU market by 2030, increasing the market share from about 15% in 2025 to 40%-45%.

If calculated with a 20 times price-to-earnings (PE) ratio, the corresponding target stock price for ARM would be around $420 to $800, which is a significant upside of 2 to 4 times compared to the current price of about $210.

Intel: Rating Upgrade, Supported by Triple Logic

Analysts have the most aggressive view on Intel. Since the end of 2025, Intel's stock price has more than doubled, with a gain of over 100% in the past month.

Evercore ISI expects Intel's EPS in 2030 to be $7/$15 under base/bull scenarios, with corresponding target prices of $111/$203.

The supporting logic has three pillars: first, intelligent agent AI will push the CPU/GPU ratio from 1:1 to 8:1, and as the leader in server CPUs, Intel will benefit directly; second, the company's operating profit margin is expected to rise by 500 basis points, with net debt expected to decrease by $17 billion, and the restructuring path is clear; third, as the only top-tier chipmaker in the United States, the trend of supply chain diversification amid geopolitical games will continue to attract traffic.

AMD: Dual Track of CPU+GPU

AMD is considered to have both the server CPU and AI GPU as its main business lines, and Evercore ISI expects its EPS center in 2030 to be between $50 and $65. If given a 20 times PE, the corresponding target stock price would be around $1,000 to $1,300, and compared to the current price of about $460, the potential increase is more than double.