Intel and AMD Earnings Preview: Glimmers of Data Center Recovery Emerge, PC Market Concerns Persist

The strong recovery in server CPU demand is providing critical support for Intel and AMD, but the continued weakness in the PC market constitutes a non-negligible downside risk. The quarterly earnings reports soon to be released by both companies will be tested by the market against this divergent backdrop.

According to Chase Trading Desk, in a preview report released by Bernstein Research on July 21, analyst Stacy A. Rasgon maintained a "Market Perform" rating and a $100 price target for Intel, and an "Outperform" rating and a $600 price target for AMD.

The report pointed out that the strong momentum in the data center business is expected to partially offset the drag from client-side businesses, but full-year forecasts for both companies are below market consensus, with the main divergence centered on PC demand assumptions.

Intel's stock has risen 163% year-to-date, significantly outperforming the broader market and the Philadelphia Semiconductor Index; AMD's gain over the same period reached 135%, although both have retreated noticeably from recent highs.

Bernstein believes that the cyclical recovery in server CPU demand, coupled with the upward revision in demand brought about by agentic AI, is the core driver behind the strong performance of both companies' stocks, while memory price pressure in the PC market is currently the most significant uncertainty factor.

Intel: Server Narrative Boosts Sentiment, PC and Foundry Remain Variables

Intel is scheduled to announce its Q2 2026 results at 5:00 PM Eastern Time on Thursday, July 23.

Bernstein predicts Intel's Q2 revenue will be $14.3 billion, with non-GAAP EPS of $0.20, slightly below the Bloomberg consensus of $14.4 billion and $0.21. The full-year 2026 forecast is $57.6 billion in revenue and $1.07 per share, lower than the consensus of $58.6 billion and $1.11; the 2027 forecast is $63.3 billion in revenue and $1.50 per share, also below the consensus of $66.0 billion and $1.57.

The report noted that Intel is currently benefiting from extremely strong server demand—this is both a cyclical repair of pent-up demand accumulated over several years post-pandemic, and an acute upward revision in demand driven by agentic AI. Notably, even though Intel's current server products are relatively weak in competitiveness, it has been able to sell off inventory previously considered obsolete, as customers are willing to buy any available product. Meanwhile, market discussions surrounding Intel's foundry business (IFS) are becoming increasingly active, involving rumors of potential cooperation with Apple and AI packaging businesses, which are considered somewhat credible, especially in the packaging sector.

However, the outlook for the PC business remains concerning.

Data from IDC and Gartner show that global PC shipments in Q2 2026 declined by 5% and 4% year-over-year, respectively, a significant slowdown from the mid-single-digit growth in Q1. Quarter-over-quarter figures were essentially flat (IDC: +0.4%, Gartner: -0.9%), broadly consistent with pre-pandemic seasonal patterns but weaker than recent performance. Notebook shipments from Taiwanese ODMs fell 4% year-over-year in April and 12% year-over-year in May. Dynamics in the memory market are believed to further suppress PC demand in the second half of the year.

Bernstein stated that the strong performance of the server business and the strengthening of the foundry narrative may form a hedge, but this could come with an increase in capital expenditure, thereby putting pressure on free cash flow and margins. The report stated that analysts are "more optimistic about Intel than at any time in a while," but fundamentals (market share trends, PC outlook, etc.) still face overall challenges.

AMD: AI GPU Potential Underestimated, 2027 Expectations May Still Be Low

AMD is scheduled to announce its Q2 results on Tuesday, August 4, and will hold its 2026 "Advancing AI" conference in San Francisco from July 22 to 23. CEO Dr. Lisa Su will deliver a keynote speech at 9:30 AM Pacific Time on the 23rd.

Bernstein predicts AMD's Q2 revenue will be $11.2 billion, with non-GAAP EPS of $1.60, slightly below the consensus of $11.3 billion and $1.62. The Q3 forecast is $11.7 billion in revenue and $1.65 per share, significantly lower than the consensus of $12.4 billion and $1.84, mainly due to weak PC assumptions and the modeling of MI450 GPU ramp-up primarily concentrated in Q4. The full-year 2026 forecast is $47.9 billion in revenue and $6.98 per share, lower than the consensus of $50.0 billion and $7.30.

However, Bernstein's forecast for AMD in 2027 is higher than the market: predicting revenue of $82.2 billion and EPS of $14.61, above the consensus of $77.7 billion and $13.35. The report believes that the Bloomberg consensus forecast for AMD's 2027 AI GPU revenue (approximately $33.5 billion) is significantly low, while Bernstein's own forecast is approximately $43.0 billion, assuming that customers such as OpenAI and Meta will have achieved scaled shipments by then.

The report pointed out that AMD benefits even more than Intel in the server CPU market because its products possess real market competitiveness and are continuously gaining share. Regarding AI GPUs, the pace of the MI450 ramp-up (Q3 or Q4?) is a key variable to watch in the near term. Bernstein believes that with the dual advancement of server CPUs and AI GPUs, AMD is poised to achieve its 2030 EPS target of over $20 several years early—the firm predicts AMD could approach this level by 2028.

The upcoming "Advancing AI" conference is seen as a potential catalyst, possibly bringing new customer announcements, product roadmap details, and Total Addressable Market (TAM) updates. The report also mentioned AMD's recent partnership announcement with Microsoft and noted that although AMD's stock has corrected significantly from recent highs, Bernstein believes there are investment opportunities at current levels.

PC Market: Memory Pressure Constitutes H2 Concern

Weakness in the PC market is a common thread running through the preview reports for both companies and is the core reason why Bernstein's forecasts are below market consensus.

Data from IDC and Gartner show that PC shipments in Q2 declined by 4% to 5% year-over-year, marking a significant slowdown from the mid-single-digit growth in Q1. Combined notebook shipments from Taiwanese ODMs in April and May fell 8% year-over-year. After a sharp 34% month-over-month decline in April, May saw only a slight rebound of 2%.

Bernstein believes that dynamics in the memory market will further suppress PC shipments in the second half of the year. Channel inventory status and whether CPU channels have returned to normal will be important points of focus during both companies' earnings conference calls. For Intel, the weakness in the PC business is compounded by pressure from declining market share in notebook CPUs; for AMD, PC client-side risk is also the main drag causing its full-year 2026 forecast to fall short of consensus.