Advanced Micro Devices vs. Arm Holdings: Which AI CPU Stock Is the Better Buy?

AMD’s EPYC CPUs are benefiting from rising demand across cloud, enterprise, and agentic AI sectors.

Arm Holdings is moving into finished chips, which can increase revenue but also adds to execution risk.

AMD looks more attractive for investors who want near-term revenue visibility in the AI CPU business.

Artificial intelligence (AI) infrastructure has been dominated by graphics processing units (GPUs). But the next phase of AI adoption, especially inference (the deployment of AI models in production environments) and agentic AI, is also driving increased demand for central processing units (CPUs).

In large AI systems, CPUs help coordinate data movement, networking, and orchestration across multiple AI chips. That makes Advanced Micro Devices (NASDAQ: AMD) and Arm Holdings (NASDAQ: ARM) two very different ways to invest in the AI CPU opportunity.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »

AMD is increasingly valued as a data center infrastructure company, not just a PC or gaming chip player. In the first quarter , AMD's revenue rose 38% year over year to $10.3 billion. The company's data center segment revenue jumped 57% to $5.8 billion, driven by strong demand for EPYC server CPUs and the continued ramp of Instinct AI GPUs.

The company now expects the server CPU total addressable market (TAM) to grow at more than 35% annually and exceed $120 billion by 2030. This is a significant upward revision from the expected 18% annual growth for the next three to five years. Management also expects server CPU revenue to grow by more than 70% year over year in the second quarter.