Wall Street got a fresh jolt Tuesday as analysts at KeyBanc Capital Markets boosted their outlook for Intel and Advanced Micro Devices (AMD) — two of the market’s biggest chipmakers — citing accelerating demand for AI-ready server chips that’s reshaping the tech sector.
The firm raised both stocks to an “overweight” rating, signaling confidence that they’ll outperform the broader market thanks to surging interest from data centers and cloud providers. Investors responded by pushing shares noticeably higher in Tuesday’s trading.
What’s Driving the Upgrade
KeyBanc’s newest research points to unexpectedly strong appetite from hyperscalers — massive cloud platforms like AWS and Google — for processors that power artificial intelligence workloads. This demand has been so intense that both Intel and AMD are nearing “sold out” status for their server CPU inventories in 2026.
Here’s how KeyBanc sees it:
- Intel’s server CPU orders are largely filled for 2026, and all signs point to continued strength in AI-driven data-center spending.
- That tight supply could give Intel leverage to bump prices by 10% to 15% — something it’s actively considering.
- Intel’s shares rallied sharply after the upgrade and new price target of $60.
On the AMD side, analysts now expect its server CPU business to grow by at least 50% this year, underpinned by demand for its AI chips. That boost helped KeyBanc set a $270 price target for AMD.
AI GPUs Take Center Stage
Beyond CPUs, KeyBanc forecasts that AMD’s AI-focused graphics processors could generate $14 billion to $15 billion in revenue in 2026, a massive haul that reflects the rapid expansion of AI infrastructure spending.
What This Means for the Market
The upgrade comes amid a broader narrative of tight supply and booming demand for chips that power machine learning and cloud services. Unlike the frenzy around AI accelerators like Nvidia’s GPUs, this story highlights how standard server processors are suddenly at the heart of the chip boom.
For investors, the move signals renewed optimism in legacy chip names that have struggled at times to keep up with newer rivals — especially Intel, which has faced headwinds in recent years. A strong AI server cycle could be the catalyst these companies need to regain momentum in 2026.
