Street Calls of the Week
Investing.com -- Intel’s newly announced collaboration with Nvidia (NASDAQ:NVDA) is weighing on AMD(NASDAQ:AMD) shares, but Bank of America (BofA) argues that the competitive dynamic may not be as negative as it first appears.
BofA raised its price objective on Intel (NASDAQ:INTC) to $34 from $25, citing the potential for modest product benefits from the collaboration, while reiterating a Neutral rating.
The bank’s analysts suggest that Intel’s expanded commitments could end up being a relative positive for AMD in the near and medium term.
The partnership between Intel and Nvidia, which covers new product development, has naturally sparked investor concerns given the historic zero-sum nature of Intel and AMD’s rivalry.
Yet, analysts led by Vivek Arya note that “greater chance of success for x86, especially in enterprise, benefits AMD also, not just Intel,” even if some of AMD’s edge in cloud may be blunted if Nvidia accelerates collaboration with Intel’s server CPUs.
x86 is a widely used processor architecture, created by Intel and shared with AMD, that powers most PCs and servers.
Another key point is timing. Chip collaborations typically take years before reaching the market, and BofA stresses that Intel’s competitive needs are more immediate. That gap gives AMD space to maintain momentum without an immediate headwind.
The analysts also flag the risk that Intel could become distracted by managing multiple stakeholders—SoftBank, Nvidia, and the U.S. government—which could dilute its focus and execution capacity.
Moreover, Intel’s reliance on Nvidia for graphics technology signals that its own desktop CPU graphics fix remains incomplete. That leaves AMD better positioned in that segment in the near term.
BofA maintains a Buy rating on AMD with a $200 price objective, based on 33 times 2026 expected non-GAAP EPS, near the high end of its historical valuation range.
The price target is “justified by AI growth and CPU share gains offset by slower growth in cyclical embedded/console markets,” BofA said.