Intel’s latest earnings report revealed robust demand for central processing units (CPUs), signaling a significant uptick as businesses accelerate their artificial intelligence initiatives. This positive performance propelled Intel’s stock upward and spurred investor interest in other major chip manufacturers, notably Advanced Micro Devices (AMD).
AMD shares experienced a notable surge of over 12% on Friday, a reaction attributed to Wall Street analysts being taken by surprise by Intel’s strong CPU performance. The prevailing sentiment is that this strength will extend to other key players in the CPU market.
“We had anticipated CPUs to become the next major bottleneck in AI infrastructure, but Intel’s results suggest that this is already translating into substantial upside,” wrote Gil Luria, an analyst at D.A. Davidson, in a recent note. “The CPU is reasserting its indispensable role as a foundational element of the AI era. The once-dormant CPU market has experienced a dramatic resurgence as agentic workloads increasingly shift compute demands beyond graphics processing units (GPUs), which have been the primary focus for companies like Nvidia.”
In light of these developments, Luria upgraded AMD’s rating to “buy” from “neutral” and revised his 2026 revenue and gross profit margin forecasts upward. He also raised his price target for AMD stock to $375, indicating a potential upside of 22% from its closing price on Thursday.
This positive outlook for AMD follows Intel’s announcement of stronger-than-expected guidance for the second quarter. The broader market is now reassessing the trajectory of the CPU sector, with Intel’s performance serving as a key catalyst.
“Intel now projects double-digit server CPU unit growth in 2026, a significant revision from their previous expectation of only modest growth six months ago,” commented Atif Malik, an analyst at Citi. He subsequently upgraded Intel’s stock to “buy” from “neutral.”
The market consensus suggests a widespread improvement across CPU manufacturers and data center equipment providers, catalyzed by the positive news from Intel, with AMD positioned at the forefront of this trend. Suji Desilva of Roth observed, “Based on indications of increased participation in high-growth AI infrastructure, we are substantially increasing our price target to align Intel’s target multiple with its AI infrastructure peers, including AMD, Marvell (MRVL), Credo Technology (CRDO), and Alation (ALAB) – all of which currently hold ‘Buy’ ratings.”
Barclays analyst Tom O’Malley, however, raised the possibility of Intel ceding market share to its competitor, AMD. He noted in his analysis, “Our downside case of $40 is predicated on a multiple of 47x our downside CY27 fully diluted EPS of $0.85, which assumes a greater loss of market share to AMD,” alongside other considerations. Intel was trading around $81 per share early Friday.
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