Intel’s CPU Comeback Lifts All Boats — Can AMD and ARM Ride the Same AI Wave?

When Intel (NASDAQ:INTC | INTC Price Prediction) released its Q1 2026 earnings last week, the semiconductor sector got a clear signal: the AI demand story holds firm, and it’s expanding beyond GPUs into CPUs. Intel’s overall revenue reached $13.6 billion, up 7% year-over-year from $12.7 billion, beating expectations handily. Its Data Center and AI (DCAI) segment delivered $5.1 billion, a 22% jump from the prior year. That’s the kind of number that reassures investors the infrastructure buildout continues.

The Philadelphia Semiconductor Index rose more than 4% the next day. Intel shares themselves gained nearly 24%. Yet ARM Holdings (NASDAQ:ARM) and Advanced Micro Devices (NASDAQ:AMD) stood out, climbing 15% and 14%, respectively. 

What Intel’s numbers told us last week was that the AI narrative has broadened. Let’s see whether those tailwinds can also keep propelling its rivals at the same pace they’ve enjoyed lately.

ARM Holdings (ARM)

ARM doesn’t manufacture chips like Intel. It designs architectures and licenses them to partners who build everything from smartphones to servers. That model gives it broad exposure without the fab costs. Intel’s results highlighted a pivot that plays directly into ARM’s hands.

Intel CEO Lip-Bu Tan noted on the earnings call that AI is moving “from foundational models to inference to agentic.” That’s a fancy way of saying workloads now involve intelligent agents handling tasks autonomously, often requiring more balanced hardware mixes with heavier CPU roles for inference and multi-agent systems. That was proven by Intel’s DCAI revenue growth, and executives pointed to accelerating CPU investments as customers shift away from GPU-only setups.

ARM-based designs already power much of the edge and mobile world, and the company has pushed into data center and AI inference. The broader validation of CPU relevance in AI infrastructure is what sent ARM shares soaring, meaning the stock has doubled in just the past three months. That reflects growing optimism around its royalty-based revenue stream scaling with AI adoption.

Will the tailwinds blow as strongly for ARM? Its licensing business benefits from industry-wide CPU demand without direct competition in fabrication. Partners like Amazon (NASDAQ:AMZN) and others expand ARM-based custom silicon, potentially amplifying gains as agentic AI distributes compute closer to users. 

That said, ARM trades at a premium valuation typical of high-growth tech as investors pay for the compounder potential. If CPU demand sustains double-digit growth into 2027, as Intel suggested for the sector, ARM’s royalties could compound nicely. The meteoric climb looks supported by structural shifts, though any slowdown in overall AI capex would test the premium multiple.

In short, Intel’s data didn’t just lift ARM on sympathy. It confirmed a hardware mix change that aligns with ARM’s architecture strengths in efficient, scalable inference.

Advanced Micro Devices (AMD)

AMD competes head-on with Intel in x86 server CPUs through its EPYC lineup. Intel’s stronger-than-expected DCAI performance — where demand outpaced supply, leading to missed sales of at least $1 billion — signaled robust broader CPU appetite. Analysts viewed this as a precursor for AMD’s own data center momentum.

Analysts at D.A. Davidson upgraded the stock to Buy and raised their price target to $375 from $220, citing “meaningful upsides” for AMD’s CPU franchise and a structural increase in demand. AMD’s stock has climbed almost 60% in the past month, hitting records as the market reprices CPU tailwinds.

AMD’s Q4 2025 data center revenue already hit a record $5.38 billion, up 34% year-over-year from the prior period. Intel’s commentary on double-digit server CPU unit growth in 2026 — revised upward from slight growth expectations — suggests the category is expanding for multiple players. AMD holds meaningful server CPU share and targets further gains, potentially toward 50% in the long run.

Can AMD maintain its meteoric pace? The company benefits directly from x86 CPU demand in data centers, where AI inference and agentic workloads require host processors alongside accelerators. Stronger visibility into the “great data center buildout” supports higher revenue and margin forecasts. That said, AMD faces intense competition from Intel’s renewed push and Nvidia‘s (NASDAQ:NVDA) ecosystem dominance in training. Supply constraints at Intel highlight industry-wide bottlenecks; if AMD ramps effectively, it could capture more share.

Granted, valuations across semis have expanded. AMD’s recent run reflects both its own growth and sector rotation. When all is said and done, Intel’s results provide data-backed reassurance that CPU demand isn’t peaking — it’s evolving. AMD’s upcoming Q1 report on May 5 will test whether the company delivers its own beat.