AMD is seen as an also-ran in the market for AI chips. But a BofA analyst thinks the company can still capture meaningful opportunity there.

Shares of Advanced Micro Devices Inc. are down 7% so far in 2025 and off 32% over the past year. But analysts at Bank of America say the company has "sufficient room" in the booming market for artificial-intelligence chips.

Nvidia Corp. $(NVDA)$ is expected to command more than 80% of the market for AI accelerators, or hardware that helps run AI applications, according to Bank of America research analyst Vivek Arya. Custom chips from tech companies could garner a further 10% to 15% in market share, by his estimates. Still, Arya is upbeat about AMD $(AMD)$ and thinks the company could see "a credible 3%-4% share" of that market. The total addressable market for AI accelerators could reach more than $400 billion, Arya said in a Wednesday note to clients.

"Many customers have significant internal workloads and compute requirements for internal teams where AMD can play an important role," Arya said. "Its recent acquisitions across rack-scale systems and improving software position it well."

AMD introduced its Radeon RX 9060 XT and Radeon AI Pro R9700 graphics cards at Computex 2025 in Taipei, Taiwan, earlier this week, along with its Threadripper 9000 Series of processors.

The new chips are "[e]ngineered to address the toughest workloads in gaming, content creation, professional industries and AI development," the company said. The Radeon AI Pro R9700 graphics processing units are designed to speed up local AI inferencing, model finetuning and other AI workloads, according to AMD.

The chipmaker also announced at Computex that it was expanding its partnership with Taiwanese electronics manufacturer ASUSTeK Computer Inc. (TW:2357)on the Expert P Series Copilot+ PCs built with its Ryzen AI Pro 300 Series chips.

Bank of America's Arya is looking forward to new partnerships and product announcements at the chipmaker's upcoming AMD Advancing AI event in June.

Meanwhile, AMD announced a $10 billion partnership with Saudi Arabian AI firm Humain earlier this month to build out the startup's AI infrastructure over the next five years. Rosenblatt Securities analysts called the deal a "positive" for the company, and said it should help AMD and Nvidia, which also announced a deal with Humain, "partially offset the impact from the recent U.S. export restrictions to China."

Arya said in a previous note that the deals could be worth around $3 billion to $5 billion each year - and between $15 billion and $20 billion over a five-year period.

However, Arya said in his note on Wednesday that AMD still faces "geopolitical uncertainty" in anticipation of President Donald Trump's tariffs - "especially as it relates to consumer PC, gaming, enterprise demand."

The analyst further noted that under new management, AMD competitor Intel Corp. $(INTC)$ "could reverse share losses at some point."

AMD's shares closed down 1.3% on Wednesday.