Intel receives buy rating amid AI-driven CPU demand

Intel Corporation is seeing positive momentum driven by a shortage in central processing unit (CPU) supply for data centers, fueled by the growth of generative and agentic artificial intelligence. New Street Research has upgraded Intel to a “buy” rating with a $125 price target, citing a projected recovery supported by server processor demand.

Analysts expect Intel’s server-related production capacity to increase by more than 50% by 2027 through the expansion of the Intel 3 process node and the introduction of the 18A manufacturing line. This growth is supported by a strategic shift of production capacity from personal computer components toward server-grade hardware.

Financial assessments indicate that Intel’s Data Center and AI (DCAI) segment margins have seen significant year-over-year increases. Additionally, the company’s foundry business is showing signs of improvement, with shrinking losses and better yields on the 18A process, supported by a pipeline that includes companies such as Apple and Tesla.