Intel’s recent earnings report presented a disappointing picture for investors, but the market’s reaction may have inadvertently created an opportunity for Advanced Micro Devices (AMD). The chipmaker’s struggles are driven by significant internal supply constraints, particularly with its Intel 7 technology used in server CPUs, limiting its ability to meet the high demand in the booming AI-driven server market.
Intel’s Supply Challenges and AMD’s Potential
Intel’s recent 10-K filing revealed a potential upside for Advanced Micro Devices (AMD) due to Intel’s server CPU market performance. Intel’s estimated server CPU shipment growth lagged behind overall market growth, indicating an opportunity for AMD to capture a larger share. This dynamic occurs because market share doesn’t disappear when supply constraints collide with surging demand. As of February 2024, the chipmaker’s full-year 2025 external foundry revenue reached $307 million. This figure includes $222 million in the fourth quarter, a sharp increase from $159 million in 2025, according to analyst Aaron Rakers. The deconsolidation of Altera, which Intel partially sold to Silver Lake in September 2025, also contributed to Q4 external revenue.
Intel’s Server CPU Volume and Pricing
However, the 10-K showed that Intel’s server CPU volume rose 9% year-over-year (YoY) in 2025. Simultaneously, the average selling price declined 4%, partly reflecting pricing actions taken in the first half of the year and a higher mix of “lower core count products,” according to Rakers. This decline in average selling price further strengthens AMD’s competitive position. Intel’s management acknowledged that the AI infrastructure buildout is fueling “unprecedented demand” for semiconductors, and they are making progress in improving chip-manufacturing yields, but have not yet reached industry-leading levels.
Analyst Reactions and Price Target Increases
Several Wall Street analysts reacted positively to the news, bolstering optimism for AMD. Piper Sandler analyst Harsh Kumar raised his price target on AMD stock to $300 from $280 and reiterated his “Overweight” rating. He anticipated AMD to continue gaining market share in the server CPU market. UBS analysts also voiced a positive sentiment, stating that Intel’s difficulty keeping up with demand “reads very positively for AMD,” suggesting the company was likely gaining share. The consensus among analysts paints a picture of considerable excitement surrounding AMD’s prospects, particularly heading into 2026 and the March quarter guidance. The mean price target for AMD stock stands at $286.49, implying a 13.4% upside potential from current levels.
AMD’s Upcoming Results & Key Focus Areas
AMD is set to report its fourth-quarter results next Tuesday after the market closes. Analysts expect quarterly revenue of $9.67 billion, up 26.25% YoY. The company’s earnings per share (EPS) are projected to grow 20.97% YoY to $1.32 in Q4. Key focus areas include MI300/MI350 GPU demand, margin trends, and competition with Nvidia in the AI chip market. AMD’s Data Center segment is expected to be a major growth driver, supported by continued strong demand for Instinct accelerators and EPYC CPUs. The company is expanding production of its latest chips and scaling manufacturing to full AI systems, following competitors like Nvidia to meet robust demand. Last year, AMD completed its acquisition of ZT Systems, adding capabilities to design rack-scale AI servers that integrate chips, networking, and software. Investors will closely watch to see how much ground AMD gains in the AI chip market, particularly relative to Nvidia’s dominant position.
Final Outlook
The Client (PC) segment is expected to show significant YoY growth as well, bolstered by strong demand for AI-enabled Ryzen processors. Investors will also scrutinize the company’s adjusted gross margin. This metric is critical to assessing the company’s profitability and competitive positioning. In addition, market participants will closely monitor the chipmaker’s guidance for Q1 2026. Overall, the market is closely watching AMD, anticipating continued success fueled by Intel’s supply limitations and the surging demand for AI infrastructure.