AMD and Intel shares rebounded sharply on Thursday, reversing losses from previous sessions as Microsoft’s stronger-than-expected cloud results boosted confidence in artificial intelligence infrastructure spending and lifted the broader semiconductor sector.
AMD and Intel shares both rose 13% each in the session.
The broader chip industry also advanced, with the iShares Semiconductor ETF (SOXX) gaining more than 8%.
The rally followed Microsoft’s quarterly earnings, which showed stronger Azure cloud growth and eased investor concerns that massive AI infrastructure investments were failing to generate returns.
The positive results helped improve sentiment toward semiconductor companies that had come under pressure in recent weeks amid concerns over AI spending, valuations and growing competition.
Susquehanna raises AMD target on AI and data center growth
Susquehanna analyst Christopher Rolland reiterated his Buy rating on AMD and increased his price target to $500 from $450, citing stronger prospects for the company’s data center business.
Rolland expects AMD to deliver improved financial results and guidance, driven primarily by server CPUs and data center GPUs.
He believes server CPU demand could exceed expectations as the total addressable market expands, while new customer wins support a ramp-up of the company’s MI450 data center GPU.
The analyst now forecasts more than $31.5 billion in data center revenue for 2026, with both server processors and GPUs expected to accelerate significantly during the fourth quarter of that year.
Rolland also highlighted AMD’s AI roadmap, noting continued MI350 GPU growth during the first half of 2026 followed by a “significant ramp” later in the year as the MI450 platform and Helios infrastructure launch.
He expects deployments to be led initially by customers including OpenAI and Meta.
The analyst also pointed to AMD’s 2-gigawatt infrastructure agreement with Anthropic, with the first 1-gigawatt deployment expected during the first half of 2027.
Management is targeting AI-related revenue in the “tens of billions” of dollars by 2027.
Rolland noted that CEO Lisa Su has increased AMD’s estimate for the 2030 server CPU market to around $220 billion, reflecting growing demand from agentic AI workloads, where some applications now require CPU-to-GPU ratios greater than one.
Beyond AI infrastructure, Susquehanna expects AMD’s client PC business to outperform the broader market through enterprise market share gains and pricing improvements, while embedded demand continues to strengthen in FPGA applications serving AI, aerospace and test equipment.
Intel benefits from improving server economics
Intel also received positive commentary from Wells Fargo, which highlighted improving pricing trends across the company’s server processor business.
Analyst Aaron Rakers noted that Intel’s latest quarterly filing showed shipments of Xeon server processors increased 9% year over year, while average selling prices jumped 48% over the same period.
Rakers also pointed to stronger profitability in Intel’s data center operations.
The company’s Data Center and AI segment reported a 56% gross margin, improving by 8.4 percentage points from the previous quarter.
In addition, revenue from Intel’s custom AI chip business tripled from a year earlier while generating $1.84 billion in operating income, underscoring stronger financial performance within its AI-related operations.
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