KeyBanc upgrades Intel and AMD on surging hyperscaler demand

Investing.com -- KeyBanc Capital Markets has upgraded Intel and AMD to Overweight, citing stronger-than-expected data-center demand and tightening memory supply across the semiconductor industry.

Analyst John Vinh said the firm’s conclusions follow a recent trip to Asia that revealed “outsized hyperscaler demand” is disrupting supply chains and driving steep price increases for DRAM and NAND.

KeyBanc noted that Intel, which was assigned a $60 price target, is “largely sold out in server CPU in 2026,” with hyperscalers driving demand so strongly that the company is considering “a 10–15% ASP increase.”

The firm added that improving manufacturing yields was another reason for the upgrade, noting that Intel’s 18A process is now “over 60%” and “good enough to ramp Panther Lake.”

Early traction in Intel’s foundry business was also highlighted, with Vinh saying IFS has landed Apple for “low-end M-series processors” on 18A and is in talks to support “A-series processors for iPhones in 2029.”

AMD was also raised to Overweight with a $270 price target, with KeyBanc saying the chipmaker is “almost being completely sold out of server CPU in 2026.”

The analysts estimate AMD’s server CPU business “will grow at least 50% this year,” while AI-related revenue should reach “$14B–$15B” in 2026, supported by shipments of MI355 and a significant ramp of the MI455-powered Helios platform.

KeyBanc believes that memory shortages will pressure the PC market but create a “favorable GM mix” for AMD.

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