Advanced Micro Devices, Inc (NASDAQ:AMD) and Intel Corp (NASDAQ:INTC) stocks gained on Tuesday after KeyBanc analyst John Vinh upgraded both the stocks citing strong server demand for artificial intelligence.
KeyBanc Upgrades AMD And Intel On AI Server Demand
December cloud data showed a modest pullback in traditional servers as providers retired older instances, Vinh says. The trend pushed compute processor instances down 2% month over month but still up 11% year over year.
Cloud Data Shows Mixed Momentum Across Providers
Total cloud instances also fell 2% sequentially and rose 10% from a year ago:
- Amazon.com Inc (NASDAQ:AMZN) Amazon Web Services (AWS) up 3% M/M
- Google Cloud Platform (GCP) up 1%
- Alibaba Group Holding Limited (NYSE:BABA) up 30% Y/Y despite a 4% M/M decline, and
- Azure down 6% M/M and 8% Y/Y.
Vinh's read-through favored Intel over AMD on near-term instance momentum.
Intel Gains Traction, AMD Holds Steady
Intel instances declined 3% M/M, but its newest Granite Rapids generation jumped 12% M/M to 1,933 instances, driven by AWS deployments.
Emerald Rapids rose 2% M/M and Sapphire Rapids increased 6% M/M, lifting combined latest-gen Intel growth 4% M/M.
Vinh called the tracker's stock implications positive for Intel and neutral for AMD.
AMD held flat M/M in December, with processor instances up 16% Y/Y.
Turin instances grew 4% M/M to 2,252 after a sharp jump the prior month, supported by deployments across Alibaba, AWS, and GCP.
Genoa instances rose 1% M/M, mainly on AWS and GCP, pushing combined latest-gen AMD growth (Turin/Genoa) up 2% M/M.
On valuation and ratings, Vinh upgraded the rating from Sector Weight to Overweight on AMD with a $270 price forecast based on 34x his 2026 EPS estimate of $7.93, noting AMD trades at 32x the 2026 consensus EPS versus peers averaging 27x.
He also upgraded the rating from Sector Weight to Overweight on Intel at Overweight with a $60 price forecast based on 4.0x EV/S on his 2026 revenue estimate of $57.8 billion, while noting Intel trades at 4.3x consensus EV/S versus a three-year median of 2.6x.
Price Actions: AMD stock was up 6.14% at $220.30 at last check Tuesday. Intel was up 3.15%.
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