- KeyBanc upgraded Intel and AMD to Overweight, citing hyperscaler-driven AI demand that has 2026 server CPU supply largely sold out.
- Intel’s improving 18A yields (over 60%) support potential 10–15% CPU ASP increases and growing foundry ambitions.
- AMD expects at least 50% server CPU growth in 2026 and $14–15B in AI revenue as MI355 ships and MI455/Helios ramps.
- KeyBanc raised Micron’s price target to $450 on an AI-driven, supply-constrained memory upcycle with limited new capacity until mid-2027.
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The semiconductor sector, particularly key players like Intel, AMD, and Micron, is entering what KeyBanc calls a “stronger-for-longer” memory super-cycle, primarily driven by demand from hyperscalers and shortages in DRAM & NAND supply chains.
Intel (INTC): Improved manufacturing yields—over 60% on its 18A process—have given it greater confidence, enabling speculative plans for 10–15% price increases, better margin mixes, and early foundry agreements, including for Apple’s lower-end chips. However, “sold out” supply for server CPUs in 2026 raises risk of under-delivery and inability to scale quickly.
AMD (AMD): The company is trading near full order capacity for server CPUs in 2026, with expectations of at least 50% annual growth in that business. AI-GPU segment revenues—from MI355 and MI455/Helios products—are expected to reach $14-15 billion in 2026. This gives AMD favorable product mix amid tight memory supply though the PC market may experience margin pressure.
Micron (MU): With its price target raised to $450 by KeyBanc, Micron is seen as a major beneficiary of memory tightness and AI demand. KeyBanc projects 2027 revenue of $94.4B and EPS of $45.20, both above consensus. Critical to its positive outlook is that new greenfield capacity isn’t expected until mid-2027—implicating supply constraints for at least a year.
Strategic Implications & Risks: These upgrades suggest semiconductor investors should favor companies with strong AI exposure and limited supply elasticity. Price power (ASP increases), margin expansion, and foundry diversification emerge as key levers. Risks include potential oversupply if capacity comes online sooner, pricing pressure in consumer segments, and geopolitical/China exposure—especially for Qualcomm, which is being downgraded by KeyBanc amidst weak China demand.
Supporting Notes
- KeyBanc upgraded Intel and AMD to Overweight, citing strong hyperscaler demand and memory shortages across DRAM and NAND markets.
- Intel’s server CPU production is “largely sold out” for 2026; firm considering 10-15% ASP increase.
- Intel’s 18A manufacturing yield above 60%, said to be “good enough to ramp Panther Lake”—improving margin and foundry potential.
- AMD expects its server CPU business to grow at least 50% in 2026; AI revenues projected at $14-15 B, supported by MI355 shipments in the first half and MI455 ramp in second half.
- Micron’s price target raised to $450 with expectation that new memory product capacity won’t be available until mid-2027; 2027 revenue and EPS estimates (KeyBanc) at $94.4B and $45.20 respectively.
- Consensus among analysts shifting upwards for Micron: UBS, Piper Sandler, etc., all revised targets to $400; investors pricing in tight memory supply and durable demand through AI cycle.
- KeyBanc downgrades Qualcomm (QCOM) due to weakening OEM demand in China with build plans lowered ~10% and potential price cuts required.