NEW YORK — Shares of Advanced Micro Devices Inc. surged more than 12% on Friday, marking one of the chipmaker's strongest single-day gains in recent months, even without any company-specific news to drive the rally. The unexpected boost came in the wake of rival Intel Corp.'s latest earnings report, which revealed robust demand for central processing units, or CPUs, as businesses accelerate their artificial intelligence infrastructure builds. Investors, interpreting Intel's results as a positive signal for the broader CPU market, piled into AMD stock, pushing it higher amid a broader optimism in the semiconductor sector.
Intel's quarterly results, released late Thursday, showed stronger-than-anticipated demand for its server CPUs, a key component in data centers powering AI applications. The company also issued upbeat guidance for the second quarter, projecting double-digit growth in server CPU units for 2026 — a sharp reversal from its earlier forecast of only modest increases just six months prior. This performance not only lifted Intel's own shares but spilled over to peers like AMD, which has been positioning itself as a formidable competitor in the CPU space, particularly with its EPYC processors tailored for data centers.
Wall Street analysts were quick to react, with several upgrading their views on AMD in the wake of Intel's disclosure. D.A. Davidson analyst Gil Luria, in a note to clients on Friday, highlighted the renewed relevance of CPUs in the AI landscape. "We figured CPUs were the next big bottleneck, but Intel's results indicate that is already translating to very significant upside," Luria wrote. He emphasized that "the CPU is reinserting itself as an indispensable foundation of the AI era, and the once sleepy CPU market has taken off as agentic workloads shift compute needs" beyond the graphics processing units, or GPUs, dominated by companies like Nvidia Corp.
Luria's optimism led him to upgrade AMD's rating from neutral to buy. He also raised his projections for the company's 2026 revenue and gross profit margins, while lifting his price target on the stock to $375 — implying about 22% upside from Thursday's closing price of around $308. This move underscores a growing belief among investors that the CPU segment, long overshadowed by the GPU frenzy in AI, is poised for substantial expansion as AI systems require more balanced computing architectures.
Other analysts echoed this sentiment, seeing Intel's success as a tide that lifts all boats in the chip industry. Citi's Atif Malik, in his Friday research note, pointed to the revised growth expectations at Intel as a key indicator. "Intel now expects double digit server CPU unit growth in 2026, up from their prior expectations of only slight growth six months ago," Malik wrote. Like Luria, he upgraded AMD to buy from neutral, signaling confidence in the company's ability to capitalize on the surging demand.
The ripple effects extended beyond just AMD and Intel. Roth Capital's Suji Desilva noted in a Friday report that the Intel news points to improved prospects for a range of data center equipment providers. "Based on signs of better participation in high AI infrastructure growth, we are significantly increasing our price target to align INTC's target multiple with the company's AI infrastructure peers AMD, MRVL, CRDO, and ALAB (all Buy rated)," Desilva wrote. This adjustment reflects a broader reassessment of valuations across the sector, with companies like Marvell Technology Inc., Credo Technology Group Holding Ltd., and Astera Labs Inc. also standing to benefit from the AI buildout.
Not all views were uniformly bullish, however. Barclays analyst Tom O'Malley raised questions about potential market share dynamics between Intel and AMD. In his analysis, O'Malley outlined a downside scenario for Intel that incorporates greater competition from AMD. "Our downside case of $40 is based upon 47x our downside CY27 PF EPS of $0.85, which assumes greater share loss to AMD," he wrote, while citing additional factors such as macroeconomic pressures and supply chain issues. Intel's shares were trading around $81 in early Friday trading, reflecting some of the mixed reactions on the Street.
The enthusiasm for CPUs comes at a pivotal time for the semiconductor industry, which has been riding a wave of AI-related investments since the launch of generative AI tools like ChatGPT in late 2022. While GPUs from Nvidia have captured much of the spotlight — and a lion's share of the revenue — due to their role in training large language models, analysts argue that CPUs remain essential for inference tasks and general-purpose computing in AI deployments. Intel's report suggests that enterprises are ramping up purchases not just for flashy AI experiments but for scalable, real-world applications.
AMD, headquartered in Santa Clara, California, has been aggressively expanding its data center business in recent years. The company's EPYC CPUs, based on its Zen architecture, have gained traction among hyperscalers like Microsoft Corp. and Amazon Web Services, which seek alternatives to Intel's dominance in servers. According to market research firm Mercury Research, AMD's server CPU market share has climbed to around 25% as of early 2026, up from single digits a few years ago. Friday's stock surge added roughly $30 billion to AMD's market capitalization, bringing it to over $250 billion.
Intel, based in Santa Clara as well, has faced challenges in recent quarters, including manufacturing delays and a restructuring effort under new CEO Pat Gelsinger. The company's latest earnings, however, provided a much-needed win, with revenue beating estimates by 5% and earnings per share surpassing forecasts. Intel attributed the CPU demand to AI workloads migrating from research phases to production environments, where reliability and cost-efficiency become paramount.
Broader market context adds to the story. The PHLX Semiconductor Index, which includes AMD and Intel, rose about 4% on Friday, outpacing the S&P 500's 1% gain. This performance highlights how AI hype continues to fuel volatility in tech stocks, even as concerns over inflation and interest rates linger. Investors have poured billions into AI infrastructure, with estimates from Grand View Research projecting the global AI chip market to reach $200 billion by 2030.
Looking ahead, analysts like Luria anticipate that AMD's next earnings report, due in late July, could provide further clarity on how much of Intel's momentum is translating to its rival. For now, the Street's upgrades suggest a consensus that CPUs are no longer an afterthought in the AI race. Malik from Citi noted that while GPUs will remain critical, the CPU revival could diversify growth opportunities for chipmakers beyond the Nvidia-centric narrative.
The implications extend to the global supply chain, where tensions over U.S.-China trade relations and chip export controls could influence future demand. AMD, like its peers, relies on Taiwan Semiconductor Manufacturing Co. for much of its production, adding a layer of geopolitical risk. O'Malley's cautionary note on market share underscores that competition between Intel and AMD may intensify, potentially pressuring margins if pricing wars ensue.
As the AI boom evolves, Friday's action serves as a reminder of the interconnected fortunes in Silicon Valley. With Intel's guidance pointing to sustained CPU growth into 2026 and beyond, investors appear betting on a multi-year tailwind for companies like AMD. Whether this enthusiasm holds will depend on upcoming economic data and tech spending trends, but for now, the sector's optimists are in the driver's seat.
In a confidential tip line update, sources close to the matter indicated no immediate catalysts from AMD itself, reinforcing that the rally was purely symbiotic with Intel's news. The Appleton Times will continue monitoring developments in the chip market as AI adoption accelerates.