In a remarkable development that caught Wall Street's attention, KeyBanc Capital Markets upgraded both AMD and Intel to Overweight on Tuesday, citing a stunning revelation: server CPUs are "almost completely sold out" for 2026 as artificial intelligence demand overwhelms the semiconductor industry.

AMD shares surged 6.1% to $220.30, while Intel climbed 3.2%—a notable vote of confidence in a company that has struggled to find its footing in recent years.

The 'Sold Out' Phenomenon

KeyBanc analyst John Vinh's conclusions follow a recent trip to Asia that revealed "outsized hyperscaler demand" is disrupting supply chains across the semiconductor industry.

"Intel is largely sold out of server CPUs in 2026 amid outsized data center demand. Given this strength in demand, the company is considering raising its average selling price by 10% to 15%."

— John Vinh, KeyBanc Capital Markets

The same dynamic is playing out at AMD, where Vinh notes the company is "almost completely sold out" of server processors for the year. KeyBanc projects AMD's server CPU business will grow by at least 50% in 2026.

Intel's Turnaround Gets a Boost

For Intel, the upgrade carries particular significance. The company has faced years of skepticism as it lost market share to AMD and struggled with manufacturing delays. KeyBanc's bullish stance suggests the tide may finally be turning.

The analyst highlighted several encouraging developments:

  • 18A Process Yields: Intel's latest manufacturing technology has improved to over 60% yield—a critical milestone for profitability
  • Apple Partnership: Intel has reportedly landed Apple as a customer for its 18A process, producing low-end processors for MacBooks and iPads
  • iPhone Discussions: KeyBanc believes Intel and Apple are in talks to use Intel's next-generation 14A technology for iPhone processors

The $60 price target implies 36% upside from Monday's close—one of Wall Street's highest targets for the embattled chipmaker.

AMD's AI Momentum Continues

While Intel's turnaround story grabs headlines, AMD's position in the AI boom remains the more established narrative. KeyBanc set a $270 price target, projecting AI-related revenue could hit $14 billion to $15 billion in 2026.

The catalyst: AMD's MI355 shipments and the upcoming ramp of its MI455-powered Helios platform, which represents Lisa Su's audacious bid to challenge Nvidia's dominance in AI data centers.

The Hyperscaler Effect

Behind the "sold out" phenomenon lies an unprecedented buildout of AI infrastructure by the world's largest technology companies. Microsoft, Google, Amazon, and Meta are racing to deploy the compute power needed for large language models and other AI applications.

This demand isn't just lifting GPU makers like Nvidia—it's creating a rising tide for the entire semiconductor ecosystem:

  • Server CPUs: Every AI server needs traditional processors alongside GPUs
  • Memory: AI workloads require massive amounts of high-bandwidth memory
  • Networking: Data center interconnects are becoming critical bottlenecks

KeyBanc's Asia trip revealed steep price increases for DRAM and NAND as supply chains struggle to keep pace with demand.

What It Means for Investors

The KeyBanc upgrades suggest the AI boom's benefits are spreading beyond the obvious winners. While Nvidia captures headlines with each product announcement, companies like AMD and Intel are quietly capitalizing on the infrastructure buildout.

For Intel specifically, the "sold out" status represents validation of CEO Pat Gelsinger's turnaround strategy. After years of manufacturing missteps and market share losses, the company appears to be regaining relevance in the data center market that once defined its dominance.

Whether this momentum can sustain remains to be seen—but for now, the chip giants are riding the AI wave together.