Intel (INTC +4.25%) stock jumped 4.6% through 12:30 p.m. ET Thursday. For this, you can thank the friendly bankers at Bank of America.
In a note out this morning discussing the state of the semiconductor market, BofA analyst Vivek Arya revised his forecast for growth in server CPU sales. Intel's primary product is CPUs -- and that's why the stock is up today.
Image source: Intel.
Bank of America CPU forecast
Previously, Arya had forecast CPU sales to grow into a $170 billion total addressable market (TAM) by 2030. Seeing how artificial intelligence is evolving and increasingly leaning toward agentic AI, Arya now thinks he was too conservative.
By 2030, the CPU market could hit $210 billion in sales.
That's 23.5% bigger than previously expected. What's more, it's nearly five times the size of the CPU market as recently as last year. If Arya is right in his projections, CPU demand will grow 36% annually over the next 4-5 years.
And Intel should grow at least that fast.
NASDAQ: INTC
Key Data Points
AI is evolving
Why is this happening? As the analyst explains, when AI was in its infancy -- oh, three or four years ago -- most AI work was training work as companies such as OpenAI and Anthropic trained up their models to make them more useful. Back then, GPUs were more useful than CPUs, and GPUs outsold CPUs roughly 4-to-1.
Now that AI is actually useful for many tasks, though, more people are using it, asking questions, and seeking answers, in a phenomenon known as AI "inference." In this brave new world, Arya says the right ratio for GPUs to CPUs is closer to 1:1. While GPU sales will keep growing, therefore, the logical conclusion is that CPU sales will grow much faster as they catch up.
That's great news for Intel stock.
