Why are AMD, Intel stocks gaining today?

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AMD and Intel stocks rose on Friday, rebounding after a sector-wide sell-off a day earlier as investors returned to select technology shares despite weakness across the broader market.

Advanced Micro Devices (AMD) gained 2%, while Intel was up 1.76%. Technology stocks advanced as investors assessed the outlook for artificial intelligence spending and semiconductor demand ahead of the upcoming earnings season.

The Nasdaq Composite fell 0.10%, while the S&P 500 fell 0.42% and the Dow Jones Industrial Average declined 1.09%.

Technology gained 0.43%, making it the second-best-performing S&P 500 sector behind energy, which advanced 2.50%.

Only two of the S&P 500’s 11 sectors traded higher.

Intel’s Arizona Fab expansion draws analyst attention

Intel was also in focus after Wedbush Securities highlighted the potential contribution of additional manufacturing capacity to the company’s revenue growth.

Wedbush analyst Matt Bryson said the installation of equipment at Intel’s Fab 62 facility in Arizona was consistent with expectations that production would begin in 2028.

However, he noted that it remained unclear whether the initial production lines would use Intel’s 18A or 14A process technology.

Bryson said additional capacity was important because existing constraints were limiting Intel’s ability to meet customer demand, particularly for Xeon server processors.

In his view, these constraints were also weighing on revenue growth and the company’s ability to optimise its product mix.

Intel Foundry CTO and COO Naga Chandrasekaran said this week that construction and equipment installation were underway at Fab 62, the company’s sixth high-volume manufacturing facility at its Ocotillo campus in Arizona.

Operations are expected to begin by the end of 2027, although Intel has not disclosed which manufacturing node the facility will use or its planned production capacity.

Intel has also reported progress at other US facilities.

Its plant in New Albany, Ohio, received its first major structural truss, while its Oregon development fab integrated a High-NA extreme ultraviolet lithography machine.

Susquehanna revises Semiconductor price targets

Susquehanna updated its price targets for several semiconductor companies ahead of earnings season, reflecting differing expectations across the sector.

The firm raised its AMD price target to $620 from $550 and increased its Qualcomm target to $185 from $160. However, it lowered Intel’s target to $105 from $115.

AI demand supports server chips as PC market weakens

Susquehanna analyst Christopher Rolland said artificial intelligence would likely drive much of the semiconductor sector’s potential upside, while the broader industry upcycle continued.

Rolland noted that semiconductor lead times had expanded by approximately two weeks for a second consecutive quarter in the firm’s SemiSIGnals data.

He also highlighted increasingly aggressive pricing, including a 12% quarter-on-quarter increase in the third quarter of 2025, with further price increases expected in the fourth quarter of 2026 and into 2027.

However, the PC market outlook has weakened.

Rolland said third-quarter original design manufacturer builds were tracking significantly below previous expectations, pointing to potentially below-seasonal second-half results for AMD and Intel’s client businesses.

Both companies are shifting wafer capacity from PC processors towards server products to address demand associated with agentic AI.

Rolland said the scale of potential server growth would depend on how quickly additional capacity becomes available.

He also noted that Arm-based hyperscale CPUs were expected to gain share as host processors for custom AI accelerators, while memory supply constraints could weigh on smartphone demand.

Meanwhile, expanding hyperscaler capital expenditure plans continued to support data centre demand, although power and infrastructure constraints raised questions about how much planned capacity could be delivered.

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