INTC, AMD Stocks Rally: CPU Price Hikes Signal AI Demand Shift Beyond GPUs

• Arm Holding and Nvidia are targeting AI data centers, which is contributing to a sentiment lift for Intel and AMD.
• Stocktwits sentiment for INTC and AMD improved a rung to ‘bullish’ and ‘neutral’, respectively.
• Some traders speculate there is a shortage of CPUs in the market.

Shares of Advanced Micro Devices and Intel Corp. rose sharply on Wednesday after reports of forthcoming price increases and broader market signals underscoring surging interest in central processing units (CPUs) for AI.

AMD gained 7.3%, its best session in a month, while INTC rose 7.1% to mark its best day in nearly two months. Japanese newspaper Nikkei reported that both companies informed customers of price hikes for CPUs starting in March and April.

Intel told Nikkei that it had "informed customers of planned pricing updates on select products," while AMD was not immediately available for comment. CPU quote prices have already spiked several times this year, by 10% to 15% on average or even higher, the report added, citing multiple sources with direct knowledge of the matter.

CPUs In Mainframe

The development comes amid the launch of new CPUs from Arm Holding and Nvidia targeting AI data centers, marking a shift as graphic processing units (GPUs) have typically been the hardware of choice for AI-related workloads.

A CPU handles a few complex tasks quickly, while a GPU processes many simpler tasks simultaneously in parallel. At its developer conference earlier this month, Nvidia unveiled its Vera CPUs for data centers and said that the orchestration of work divided among various types of computers and software — a job performed by general-purpose CPUs — is becoming more important.

Earlier this week, Arm launched its AGI CPU, designed for inference, or running the cloud processing for AI tools like AI agents, and signed on Meta Platform as its first customer for those chips. The news, along with the fact that it’s the first in-house Arm release after 35 years of licensing its technology to other chipmakers, sent the company's shares soaring 17% on Wednesday.

CPU-linked stocks such as computer makers Dell Technologies and HP Inc. jumped 4% and 3%, respectively, on Wednesday.

“We’re seeing a growing investor view that CPU-driven server demand may be more resilient than previously expected, driven both by general enterprise-server refresh but also the need for CPUs around AI infrastructure where they’re required to orchestrate workloads, manage data movement and handle pre/post-processing tasks,” Evercore ISI said in an investor note on Wednesday.

Retail’s View On INTC, AMD

The moves helped improve retail investors’ view of CPU makers, but caution prevailed. On Stocktwits, retail sentiment for AMD shifted to ‘neutral’ from ‘bearish’ late Wednesday, while the sentiment for INTC shifted to ‘bullish’ from ‘neutral.’ 

“$AMD strong close, bullish long term. but staying away in short term, overall market sentiment is bad right now. won't be surprised with pull back on war, oil etc. news,” said a user.

Some users also pointed to speculation that CPUs were in short supply. “$INTC CPU shortage chirps keep getting louder. It’s starting to get real real. Arm to Intel foundry,” said a user.

Shortages often lead to higher demand and higher prices, which boost shares, as has been the case in the memory chips market over the past year.

Year to date, Intel shares are up 28% while AMD shares are up just 3%.

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