BofA Upgrade Boosts Intel After AI CPU Demand, Foundry Wins

Bank of America upgraded Intel to Buy from Underperform and increased its price target to $135 from $96. Intel shares rose about 4% in premarket trading after the brokerage pointed to rising demand for CPUs tied to agentic artificial intelligence and recent foundry commitments from Alphabet, Nvidia and Tesla.

The firm raised its estimate for the global server CPU market to more than $170 billion from a previous $125 billion following discussions with industry executives and customers at its Global Tech Conference. The updated forecast implies nearly five-fold growth and a 37% compound annual growth rate between 2025 and 2030. Bank of America also raised its price target for AMD to $560 from $500.

The bank noted that next-generation AI systems, including agentic AI that can carry out complex tasks with limited human input, will increase demand for central processing units. Both traditional x86 chipmakers and companies developing ARM-based processors were identified as likely to see growing demand as data-center computing requirements expand.

Concrete customer commitments have supported interest in Intel’s foundry business. Alphabet has committed to a three-million-unit order of Tensor Processing Units for 2028 from Intel Foundry, a volume that represents about half of Google’s projected TPU output for that year. Google’s Gemini AI platform now serves more than 900 million monthly active users, increasing the company’s need for computing capacity.

Intel’s packaging and process developments were highlighted. The company’s Embedded Multi-die Interconnect Bridge packaging has reached reported yield rates above 90%, presenting an alternative to other multi-die packaging platforms that face capacity constraints. Nvidia is evaluating Intel’s 18A process node for a potential future multi-die graphics processor, and Tesla has committed to Intel’s 14A process for custom silicon in its Terafab AI computing complex in Austin.

Intel reported first-quarter 2026 revenue of $13.58 billion, exceeding consensus estimates by more than $1.1 billion, with strength in its Data Center and AI division cited as a contributor. Analysts and investors view the conversion of customer interest and orders into sustained revenue as dependent on Intel delivering its process technology roadmap and ramping manufacturing at scale.