Semiconductor stocks moved sharply higher this week, with AMD extending a powerful rally and Intel jumping 8% after reports of a coming CPU price increase. The moves came as both companies signaled strength in AI infrastructure and advanced chip manufacturing, even as broader technology demand faces mixed signals.
AMD posted quarterly results that beat expectations. Revenue reached $11.54 billion in Q2, up 50% year-over-year, while non-GAAP EPS came in at $1.66, above the consensus estimate of $1.62. Data center operating income flipped to a $2.1 billion profit. Management guided Q3 revenue to between $12.7 billion and $13.3 billion, clearing Wall Street expectations. Demand for MI accelerators and Helios rack-scale systems is driving optimism around AI-related sales.
Institutional interest also increased. Virginia Retirement Systems disclosed a new $165.15 million stake in AMD during Q2, purchasing 284,286 shares. That position makes AMD the fund's 13th-largest holding at about 1% of its portfolio. Institutional investors now own roughly 71.34% of the company.
Analyst sentiment remained bullish. Argus raised its AMD price target from $450 to $625 with a Buy rating, while KeyCorp set a $650 target. Citigroup upgraded AMD from Market Perform to Buy in July. The average price target sits near $553.72, while the consensus Strong Buy rating points to an average target around $647. On Tuesday, AMD opened at $477.57, up 4.69% on the week. The stock has risen more than 200% over the past year and trades at approximately 123 times earnings.
AMD is also targeting Intel's installed base in servers with its 5th Gen EPYC processors and upcoming 6th Gen Venice chips. The company argues customers can cut Intel Xeon server counts by up to 86%, reduce power consumption by 69%, and lower three-year total cost of ownership by 41%. J.P. Morgan's Harlan Sur projects AMD's server CPU revenue could grow more than 70% year-over-year in 2027, with data center revenue potentially more than doubling. Sur has a Neutral rating but a $550 price target. AMD also plans a $100,000-plus AI workstation in 2027.
However, margin pressures remain a concern. AMD's use of high-capacity HBM4 memory could require rack price hikes of about 9% to 10% by 2027, and growing MI450 volumes may pressure gross margins. Insiders have sold around $109.5 million worth of stock in the past three months, including sales by CEO Lisa Su and EVP Mark Papermaster. Analysts expect AMD to post EPS of $6.44 for the current fiscal year.
Intel surged 8% on Tuesday after Taiwan-based DigiTimes reported the company is considering a 10% price increase for its CPUs starting in early October. The move would continue a series of price increases that began at the end of 2025 and comes as Intel faces higher supply-chain costs and strong demand for its products. Citrini analyst Jukan Choe said the reported increase suggests Intel may prioritize expanding gross margins over gaining additional market share.
Intel also deepened its collaboration with ASML on High Numerical Aperture Extreme Ultraviolet lithography. More than 1 million wafers have now been processed using High NA EUV equipment, including testing, development, and production of certain layers used in Intel's Core Ultra Series 3 processors known as Panther Lake. Intel said chips manufactured with the technology on its 18A process are matching or exceeding the performance of comparable layers produced with existing EUV technology. ASML CEO Christophe Fouquet described Intel as one of the key leaders in adopting High NA.
Northland analyst Gus Richard upgraded Intel to Outperform from Market Perform, citing material progress in the company's turnaround and potential benefits from a server CPU shortage. He also said Intel's partnership with Tesla on the Terafab semiconductor initiative could materially benefit its foundry business.
