AI server demand has been hot, and Intel Corporation (INTC.US) received a rating upgrade and target price increase before its performance report from analysts.

Before Intel Corporation (INTC.US) announces its first quarter financial report after the market closes on April 23 (Thursday) Eastern Time, both BNP Paribas and HSBC Bank have raised their ratings and target prices, as the company is expected to continue benefiting from strong demand for AI server chips. BNP Paribas upgraded Intel Corporation's rating to "Neutral" and raised the target price to $60. Analyst David O'Connor said, "Intel Corporation's stock price has already risen by 86% this year, in our view, its trend has departed from fundamental trading logic. Data related to the 14nm process has continued to improve, significantly raising market expectations for the successful implementation of the project. At the same time, the vigorous development of Agentic AI has also driven strong demand for Intel Corporation's server chips, thereby increasing chip production capacity utilization and product pricing levels. However, the key going forward is whether the 14nm process can secure more chip design orders." O'Connor further analyzed that due to the growth in demand for server CPUs driven by AI agents, Intel Corporation is expected to continue to benefit. O'Connor said, "The rise of AI agents is driving strong demand for server CPUs, with major cloud providers vying to secure chip supply. Although Intel Corporation still lags behind in product and process capabilities, with roughly 60% of the server market share, it remains a major beneficiary. This also prompted Intel Corporation to repurchase 49% of Apollo's shares in its Fab-34 factory in Ireland earlier this month." O'Connor also pointed out that his previous concerns about Intel Corporation lagging behind AMD and Arm in the server market still exist, but in the current market environment, these concerns have become "less important." HSBC Bank upgraded Intel Corporation's rating from "Hold" to "Buy" and raised the target price from $50 to $95. HSBC Bank is highly optimistic about the continued demand for Intel Corporation's server CPUs, stating that this factor will have a greater impact on this semiconductor giant than the expansion of its foundry business. Analyst Frank Lee wrote in a client report, "Against the backdrop of overall foundry capacity constraints, Intel Corporation is reallocating its wafer foundry capacity, especially shifting capacity from client CPUs to server CPUs for Intel 3 and Intel 7. This is expected to increase its server CPU shipments by 20% year-on-year in 2026. In a high-demand and supply-constrained environment, we expect Intel Corporation to significantly increase prices, driving a 20% year-on-year increase in average selling price. We believe the server CPU shortage will continue into 2027, expected to drive another 20% year-on-year increase in shipments in 2027, with an additional 10% increase in the average selling price." He stated that the positive outlook for Intel Corporation's server CPU business is expected to become evident from the second quarter onwards, with quarterly revenue expected to reach $14.2 billion, 9% higher than Wall Street's expectations. He also added that price increases would boost gross margins, further supporting Intel Corporation's performance.