Shares of semiconductor giants Intel (INTC) and Advanced Micro Devices (AMD) remain in focus as Top Bernstein analyst Stacy Rasgon updated his outlook on both companies ahead of their upcoming earnings reports. In a new note, Rasgon, a 5-star analyst, maintained Market-Perform (equivalent to Hold) ratings on both Intel and AMD, setting price targets of $21 and $200, respectively. While he sees signs of improvement in PC and server markets, he believes both companies face important challenges heading into 2026.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Intel’s Core Problems Remain
Rasgon said Intel’s recent quarter was “Monty Python–like,” with plenty of confusion and unexpected moves. He noted that Intel raised about $16 billion in cash through deals with SoftBank, NVIDIA (NVDA), and the U.S. government. While this strengthened its balance sheet, Rasgon said it came at a cost, including share dilution and a growing dependence on one-time deals.
He also noted that PC and server demand has improved in the short term, leading to a small earnings upgrade. However, he believes Intel’s core problems haven’t changed. The company is still losing market share in both client and server chips, and its manufacturing strategy is unclear.
Rasgon also warned that Wall Street’s forecasts for next year are too high, as many analysts haven’t removed the impact of Intel’s Altera divestiture, which could lower quarterly revenue by about $1.6 billion. He added that analysts are too optimistic about profit margins, with expectations close to 80% versus Intel’s own 40–60% guidance.
Despite Intel’s 64% stock surge since its last earnings report, Rasgon said the rally is not backed by strong fundamentals. “The real bull case right now seems to be that Trump wants the stock to go up,” he wrote.
AMD’s OpenAI Deal Fuels Optimism but Raises Expectations
Turning to AMD, Rasgon said the company’s new partnership with OpenAI has driven new excitement in the stock. AMD’s shares have risen 34% since last quarter and nearly doubled year-to-date, as investors bet on its growing role in AI computing.
Rasgon believes the deal was a strategic move, saying, “AMD had to be on the OpenAI rocket ship” to stay relevant in the fast-growing AI space. Still, he noted that the company gave up about 10% of its equity to secure the partnership.
He slightly raised his forecasts, now expecting Q3 revenue of $8.94 billion and EPS of $1.22, above Wall Street’s consensus of $8.74 billion and $1.17. For 2026, he models $39.1 billion in revenue and $5.27 EPS, below the Street’s higher estimates.
The analyst said AMD’s PC and server businesses are improving, but warned that investors are too bullish about its 2027 profit potential. Some expect earnings above $10 per share, while Bernstein’s model sees mid-$8 levels. Even with that caution, Rasgon acknowledged that the near-term growth for AMD looks solid.
Which Is the Best Chip Stock, According to Wall Street?
Using the TipRanks Stock Comparison Tool, we looked at how analysts rate the two chipmakers. AMD currently holds a “Strong Buy” consensus, with about 4% upside potential over the next 12 months. In contrast, Intel carries a “Hold” rating, with nearly 24% downside risk during the same period.
