A sustained shortage of server central processing units (CPUs) driven by demand for artificial intelligence workloads has prompted a KeyBanc analyst to raise his price target on Intel to $70, suggesting a 36 percent upside for the stock.
"Total demand for servers has gotten incrementally stronger with the rise of AI-agent-driven workloads. However, supply remains heavily constrained by limited server CPU," KeyBanc analyst John Vinh said in a note to clients. Vinh maintained his Overweight rating on the stock.
The bullish outlook is based on Intel’s pricing power in the current environment. Vinh expects the chipmaker to raise server CPU prices by 10 to 15 percent in the second quarter of this year. This follows a similar price hike implemented in the first quarter. The back-to-back increases give Intel a slight edge over rival Advanced Micro Devices, which is reportedly only implementing a single round of price hikes.
The continued demand for AI hardware creates a significant revenue opportunity for Intel's data center business. While competitor AMD is also benefiting, Citi analysts recently trimmed their price target on AMD to $248 from $260, citing a new valuation approach. Intel stock slipped 0.7% to $50.05 on a day when the broader market was up, while AMD shares rose 0.6% to $216.80.
This article is for informational purposes only and does not constitute investment advice.
