Intel Surges 30% Pre-Market but Analysts Warn AMD is the Real Beneficiary of the AI CPU Boom

TradingKey - Before the U.S. market open on April 24, Intel (INTC) surged, with its gain reaching as high as 30% to hit $87.09. If this momentum holds through the opening, it will mark a record high for the stock.

On the previous day, Intel released robust first-quarter financial results, with revenue, gross margin, and earnings per share all exceeding the upper end of its guidance. This marks the sixth consecutive quarter the company has outperformed financial expectations.

The market generally believes that as inference and agentic AI drive a resurgence in CPU value, Intel's server CPU products will experience renewed vitality.

However, some institutions have voiced a different opinion: Intel might not be the primary protagonist set to truly benefit from this CPU boom. Jefferies raised its price target for Intel to $80 but maintained its "Hold" rating.

During the earnings call, Intel Vice President John Pitzer stated that the company cautiously expects PC demand to weaken in the second half of the year, with the full-year total addressable market (TAM) for PC unit shipments projected to decline by a low-double-digit percentage, consistent with assessments from industry peers and professional organizations. This decline is expected to directly impact Intel's CPU sales.

In addition, Jefferies raised concerns regarding Intel's gross margins: although CPU demand is expected to increase, most of its PC products, such as Arrow Lake (Intel Core Ultra 200) and Lunar Lake (Core Ultra 200V), are outsourced to TSMC (TSM) for fabrication, meaning that improvements in the utilization and gross margins of Intel's own foundries remain constrained.

Looking beyond Intel to conduct a cross-sectional comparison of CPU market participants, investors will find that Intel faces extremely formidable competitors. Jefferies believes this could result in Intel failing to significantly and directly benefit from the surge in CPU market demand.

The firm stated that its competitor AMD (AMD) is better positioned in the server market, especially considering that between the second half of 2026 and the first half of 2027, AMD will launch EPYC Venice using TSMC's N2 process, which is expected to further widen its lead over Intel. Jefferies pointed out that Intel is merely a "beneficiary of a structural supply-demand imbalance," rather than a leader.

Regarding market sentiment, Jefferies noted that while AI-driven server CPU demand is real, structural, and multi-year, Intel's stock is currently riding the AI wave, causing the market to overlook its inherent issues. Investors should be wary that the current share price already incorporates an excessive premium.