Intel Corporation (NASDAQ: INTC) picked up a significant vote of confidence on Tuesday when HSBC upgraded the chipmaker to Buy, targeting server CPU demand as a near-term catalyst that the market has not yet fully priced into the stock price.
The bank’s analysts argued that Intel’s position in the data centre processor market is being underappreciated at a moment when AI infrastructure build-out is driving an unusually broad wave of server procurement that extends well beyond graphics processing units into general compute workloads that Intel’s Xeon architecture directly addresses.
“We expect server CPU upside to start to manifest in the second quarter of 2026 as our revenue estimate of $14.2 billion is 9% higher than consensus at $13.1 billion,” the HSBC team wrote in their note to clients on Tuesday. The gap between HSBC’s estimate and consensus is significant because it implies that even most bullish analysts are underestimating the scale of near-term demand that Intel’s server business is positioned to capture. The note cited Intel’s foundry participation moves and an equity transaction in its Ireland facility as recent positive developments, but framed server CPU demand as the incremental catalyst that could move the stock more immediately.
Intel has already been riding positive momentum leading into the week, with the stock up from multi-year lows on a combination of improving sentiment around the company’s manufacturing roadmap and its collaborations on next-generation fabrication processes. The company’s upcoming quarterly results — scheduled for later in the week — will give investors their first direct read on whether the server demand tailwind that HSBC has identified is materialising at the revenue line in the way the bank’s model anticipates.
The Intel bull case requires believing simultaneously that Gaudi AI accelerators can gain meaningful ground against NVIDIA and AMD in AI training and inference workloads, and that the core server CPU business provides a stable and growing foundation while that longer-range bet plays out. HSBC’s upgrade focuses specifically on the second part of that equation, essentially arguing that the base is more valuable than the market has been crediting and that the AI story provides optionality on top of a business that is already recovering in its own right. For a stock that has spent much of the past two years trading well below its historical valuation multiples, the server CPU angle represents a more conservative and near-term credible version of the Intel recovery argument.
