AMD’s Data-Center Strength Lifts the Server Supply Chain as PC and Gaming Weakness Points to a Clear Avoid
J.P.
J.P. Morgan’s review of AMD’s 2Q26 earnings call and the PC and server supply chains highlights a sharp divergence between the company’s data-center business and its PC and gaming businesses.
Data-center sales rose 107% year over year and 16% quarter over quarter in 2Q26. Server CPU sales increased 70% year over year, while Instinct revenue more than doubled. AMD management raised its long-term server CPU total addressable market, or TAM, from $20 billion in May to more than $220 billion, with a 2030 target implying a CAGR of more than 50%.
J.P. Morgan attributed the CPU growth to strong general-purpose server demand, market-share gains and an improving product mix. The bank also said the MI450 series has strong customer traction, with AMD having signed multigeneration, gigawatt-scale agreements with Anthropic, OpenAI and Meta.
The supply chain is becoming more diversified, but CoWoS and advanced-packaging capacity remain bottlenecks. J.P. Morgan identified ASPEED, Wiwynn, Lotes and Delta Electronics as preferred server-supply-chain names, while classifying MSI and Compal as “top avoid” names in the PC supply chain. The note maintained a Neutral rating on AMD.
PC and gaming demand remains weak. AMD’s 3Q26 gaming-sales guidance calls for a sharp, double-digit sequential decline. J.P. Morgan said the market may not yet be fully pricing in the long-term impact of the increase in AMD’s server CPU TAM to more than $220 billion.
The note’s catalysts are the initial shipment of Helio racks in 3Q26; accelerating server CPU and AI sales and a significant increase in Helio shipments in 4Q26; progress in adding new MI450 customers; the pace at which bottlenecks in CoWoS, N3, substrates and memory ease; and an upward-revision trend in U.S. cloud-service-provider capital expenditures.
J.P. Morgan’s supported positioning is to favor the server supply chain—including ASPEED (5274.TWO, OW), Wiwynn (6669.TW, OW), Lotes (3533.TW, OW), Delta Electronics (2308.TW, OW), Unimicron (3037.TW) and Tripod Technology (3044.TW)—and avoid the PC supply chain, including MSI (2377.TW, N) and Compal (2324.TW, N). AMD (AMD, N) remains Neutral.
Data-center sales rose 107% year over year and 16% quarter over quarter in 2Q26. Server CPU sales increased 70% year over year, while Instinct revenue more than doubled. AMD management raised its long-term server CPU total addressable market, or TAM, from $20 billion in May to more than $220 billion, with a 2030 target implying a CAGR of more than 50%.
J.P. Morgan attributed the CPU growth to strong general-purpose server demand, market-share gains and an improving product mix. The bank also said the MI450 series has strong customer traction, with AMD having signed multigeneration, gigawatt-scale agreements with Anthropic, OpenAI and Meta.
The supply chain is becoming more diversified, but CoWoS and advanced-packaging capacity remain bottlenecks. J.P. Morgan identified ASPEED, Wiwynn, Lotes and Delta Electronics as preferred server-supply-chain names, while classifying MSI and Compal as “top avoid” names in the PC supply chain. The note maintained a Neutral rating on AMD.
PC and gaming demand remains weak. AMD’s 3Q26 gaming-sales guidance calls for a sharp, double-digit sequential decline. J.P. Morgan said the market may not yet be fully pricing in the long-term impact of the increase in AMD’s server CPU TAM to more than $220 billion.
The note’s catalysts are the initial shipment of Helio racks in 3Q26; accelerating server CPU and AI sales and a significant increase in Helio shipments in 4Q26; progress in adding new MI450 customers; the pace at which bottlenecks in CoWoS, N3, substrates and memory ease; and an upward-revision trend in U.S. cloud-service-provider capital expenditures.
J.P. Morgan’s supported positioning is to favor the server supply chain—including ASPEED (5274.TWO, OW), Wiwynn (6669.TW, OW), Lotes (3533.TW, OW), Delta Electronics (2308.TW, OW), Unimicron (3037.TW) and Tripod Technology (3044.TW)—and avoid the PC supply chain, including MSI (2377.TW, N) and Compal (2324.TW, N). AMD (AMD, N) remains Neutral.