Wall Street analysts were caught off guard by Intel's central processing unit (CPU) business performance that exceeded expectations, and AMD's stock price soared by more than 12%. It is generally believed in the industry that industry dividends will be simultaneously transmitted to other leading CPU manufacturers. Gil Luria, an analyst at Davidson Investment Company, said in a research report on Friday: "We previously predicted that CPUs would become the next major industry bottleneck, and Intel's financial report data shows that this track has ushered in substantial upside."
Intel’s latest financial report shows that as major companies accelerate the construction of artificial intelligence computing power, the market demand for central processors has increased significantly, directly driving its stock price to soar. The eye-catching performance data prompted investors to buy shares of another major chip giant, Advanced Micro Devices (AMD).
AMD shares soared more than 12% on Friday. The strong performance of Intel's CPU business exceeded Wall Street analysts' expectations, and the industry believes that this industry benefit will radiate to major mainstream CPU manufacturers.
Gil Luria pointed out in Friday's research report: "CPU is once again becoming an indispensable core cornerstone in the era of artificial intelligence. As the demand for computing power for intelligent agents explodes, the computing power load gradually separates from the graphics processors (GPUs) of manufacturers such as Nvidia. The CPU market, which once experienced weak growth, has rebounded strongly."
Luria upgraded AMD stock to buy from hold, raised the company's 2026 revenue and gross margin estimates, and raised AMD's stock price target to $375, which represents a 22% upside from Thursday's closing price.
The rise in the market is also due to the second quarter performance guidance released by Intel that far exceeded market expectations. Other analysts on Wall Street have also taken note of the collective strength in the CPU sector.
Citi analyst Atif Malik wrote on Friday: "Intel now expects server CPU shipments to achieve double-digit growth in 2026, while six months ago, its previous expectation was only a small increase." The analyst also upgraded Intel's stock rating from hold to buy.
Boosted by the good news from Intel, Wall Street is generally optimistic about the overall recovery of CPU manufacturers and data center equipment suppliers, with AMD becoming the core beneficiary.
Ross Capital analyst Suji De Silva said on Friday: "Combined with the gradual realization of industry dividends from the high growth of artificial intelligence infrastructure, we have significantly raised Intel's target valuation to keep its valuation multiple in line with AMD, Marvel Electronics, Cordoba, Aragon Labs and other artificial intelligence infrastructure peers. The above-mentioned companies currently have a buy rating."
At the same time, Barclays Bank analyst Tom O'Malley raised concerns that Intel may face a loss of market share to competing products AMD Risk of cannibalization.
He mentioned in the research report: "The pessimistic target price of US$40 we gave is based on the adjusted earnings per share of US$0.85 in fiscal year 2027, corresponding to a price-earnings ratio of 47 times. This calculation has taken into account the expectation that Intel's market share will be significantly seized by AMD, and also incorporates other negative factors." In early trading on Friday, Intel's stock price was about US$81.