Intel (INTC) and Advanced Micro Devices (AMD) are experiencing historic stock rallies, fueled by strategic partnerships, leadership changes, and soaring demand for artificial intelligence (AI) and data center chips. Over the past 12 months, Intel's stock has skyrocketed 220%, while AMD has surged 192%, with both companies posting multi-day winning streaks that have captivated investors.
Intel's remarkable turnaround story is led by CEO Lip-Bu Tan, who took the helm in March 2025. Tan swiftly implemented a major restructuring, cutting over 20,000 jobs and returning the company to positive free cash flow in the second half of 2025. This marks a significant shift from the cumulative negative $44 billion in free cash flow burned between 2022 and 2025. A pivotal development was a $5 billion strategic investment from Nvidia in September, with Intel set to manufacture custom x86 server CPUs designed to pair with Nvidia's GPUs. Analyst Ben Reitzes of Melius Research noted, "The demand for the x86 server CPU has gone through the roof at hyperscalers." Intel is also engaged in active AI partnerships with Alphabet and a chip-making joint venture, "Terafab," with SpaceX and Tesla.
Despite the rally, valuation remains a concern. Intel trades at approximately 95 times forward earnings, higher than peers like Nvidia and Taiwan Semiconductor (TSMC). TD Cowen raised its price target to $60 from $50 on April 9 but maintained a Hold rating, citing valuation challenges. However, some analysts, like Reitzes, see a potential path to $150 per share if Intel can recover its margins and grow revenue, targeting $7 in EPS by 2029.
Meanwhile, AMD has recorded its longest winning streak since 2005, gaining for 11 consecutive days and rising 32% in that period. The rally has been bolstered by sector-wide optimism and a sharp quarterly profit rise reported by TSMC. A key catalyst is AMD's deal with Meta, which Bernstein SocGen Group believes the market hasn't fully priced in. Bernstein raised its AMD price target to $265 from $235, while keeping a Market Perform rating, and significantly boosted its 2027 revenue outlook to $76.7 billion, well above the $67.5 billion consensus, largely due to the Meta AI deal and stronger server demand assumptions.
AMD is set to report earnings on May 5, having previously guided for 32% year-over-year revenue growth in Q1 2026, driven by data center CPU and GPU demand. Other analysts have also turned positive, with Erste Group upgrading the stock to Buy, citing data center demand and improving profitability.
