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Intel's AI Server Surge: Analyst Predicts 20% Growth
23 Jan
Summary
- Analyst Frank Lee upgrades Intel to 'Hold' and raises price target to $50.
- Agentic AI is expected to significantly increase demand for server CPUs.
- Intel's Q4 earnings expected to align with analyst and company guidance.
Intel is poised for a critical assessment of its turnaround strategy with its upcoming 4Q25 earnings report. The company's stock has seen a remarkable surge of 116% over the past year, indicating growing investor confidence. Analyst Frank Lee has upgraded Intel from a 'Sell' to a 'Hold' rating, also increasing his price target from $26 to $50.
Lee's improved outlook stems from the anticipation of a return to growth in traditional server demand, significantly boosted by the rise of agentic AI. He forecasts a 15%-20% year-over-year increase in FY26 server shipments, a figure substantially higher than the Street's expectations of 4%-6%.
While no major surprises are anticipated for the 4Q25 results, with revenue projected around $13.3 billion and gross margins near 36.5%, Lee sees potential upside in the 1Q26 guidance. He forecasts 1Q26 revenue at $13.2 billion and anticipates the DCAI segment will contribute meaningfully to growth from the first quarter onwards.
