Wall Street analysts are increasingly convinced that surging AI-driven demand for Intel’s server CPUs can offset ongoing issues in the personal computer chip market. This core dynamic is driving Intel’s stock rally and supporting higher earnings estimates.

Mizuho and Bernstein both raised price targets and earnings estimates for 2026 and 2027, but maintained a neutral rating, signaling they expect robust demand for Intel’s server CPUs to continue.

The main idea is that increasing use of AI-powered applications and services is boosting demand for Intel’s server CPUs, as these chips are essential for running complex AI workloads in data centers. Mizuho expects this trend to increase average selling prices by 10% to 15% this year and support steady revenue growth in Intel’s data center segment through at least 2026, and possibly until 2030.

Another short-term opportunity could come from the slow PC market. Mizuho suggested that Intel might use manufacturing capacity meant for consumer chips to make more profitable server products instead, turning a challenge into a benefit.

Investor sentiment remained resilient on Thursday despite strong earnings from competitor Taiwan Semiconductor Manufacturing. While some expected the news to negatively impact Intel, analysts maintain that the server CPU market can support multiple firms. However, they note that Intel still faces competitive threats from AI chip rivals in inference and significant execution risks as it scales its foundry business.

Bernstein described the upcoming first-quarter earnings report, due next Thursday, as likely to be volatile. However, they are becoming more confident that the growth in AI applications is driving real momentum in Intel’s server CPU cycle. The firm also said it is still hard to match the current stock price with short-term business fundamentals after the recent sharp rise.