AMD Stock Soars 12%: An Analysis of the Reasons Behind Investor Enthusiasm
Wall Street analysts were caught off guard by Intel's unexpectedly strong central processor (CPU) business performance, leading to a more than 12% surge in AMD's stock price. The industry generally believes that the benefits will extend to other leading CPU manufacturers. Davidson Investment Company analyst Gil Luria stated in a Friday report, "We previously predicted that CPUs would become the next major industry bottleneck, but Intel's earnings data shows that this track has seen significant upside."
Intel's latest earnings report shows that as major companies accelerate the deployment of artificial intelligence computing power, market demand for central processors has risen sharply, directly driving up its stock price. The strong performance data prompted investors to buy shares of another chip giant – Advanced Micro Devices (AMD).
On Friday, AMD's stock price soared more than 12%. Intel's strong CPU business performance exceeded Wall Street analysts' expectations, and the industry judges that this industry benefit will radiate to major mainstream CPU manufacturers.
Gil Luria pointed out in a Friday report, "CPUs are once again becoming an indispensable core cornerstone in the age of artificial intelligence. As demand for intelligent agent-like computing power explodes, computing loads are gradually shifting away from graphics processors (GPUs) of companies such as Nvidia. The previously sluggish CPU market has already experienced a strong recovery."
Luria upgraded AMD's stock rating from Hold to Buy, while also raising the company's 2026 revenue forecast and gross margin estimates, and raised AMD's target stock price to $375, a 22% increase from Thursday's closing price.
This rally also benefited from Intel's second-quarter performance guidance, which was far higher than market expectations. Other Wall Street analysts have also paid attention to the collective strength of the CPU sector.
Citigroup analyst Atif Malik posted on Friday, "Intel currently expects server CPU shipments to grow by double digits in 2026, while its previous forecast six months ago was only for slight growth." The analyst also upgraded Intel's stock rating from Hold to Buy.
Boosted by Intel's positive news, Wall Street is generally optimistic about the overall recovery of CPU manufacturers and data center equipment suppliers, with AMD being a core beneficiary.
Ross Capital analyst Suji Desilva said on Friday, "Combining the industry benefits of high growth in artificial intelligence infrastructure gradually landing, we have significantly raised Intel's target valuation, making its valuation multiple consistent with AMD, Marvell, Cordoba, and Aragon Labs, all of which are currently given a Buy rating."
At the same time, Barclays analyst Tom O'Malley expressed concerns, believing that Intel may face the risk of losing market share to its competitor AMD.
He mentioned in a research report, "The $40 pessimistic target price we give is based on adjusted earnings per share of $0.85 in fiscal year 2027, corresponding to a price-to-earnings ratio of 47 times, which already includes the expectation that Intel's market share will be significantly eroded by AMD, and comprehensively incorporates other negative factors." Intel's stock price was around $81 in early trading on Friday.