Morgan Stanley lifted its price target on Intel this week, but stopped short of calling it a buy. The bank raised the target to $56 from $41, driven by stronger server demand and higher earnings estimates for 2026 and 2027.
Analysts led by Joseph Moore bumped their 2027 earnings estimate for Intel from $0.97 to $1.34 per share. Morgan Stanley now sits about 20% above Wall Street consensus on Intel’s earnings for both years.
The bank projects Intel’s data center segment will grow roughly 30% year-over-year in 2026, reaching $21.8 billion in revenue.
Still, Morgan Stanley kept its Equal-weight rating on Intel. The main concern is Intel’s product roadmap. Weaknesses in its next-gen Diamond Rapids server chip have been flagged by Intel’s own CEO, the analysts noted.
Meanwhile, rival AMD’s Venice processor was described as “a clear major step forward.” Morgan Stanley also holds an Equal-weight rating on AMD with a $255 price target.
The analysts believe AMD is likely a bigger beneficiary of server strength due to its product leadership. But they noted AMD’s stock tends to move more on GPU performance than CPU gains.
Morgan Stanley named Micron and Sandisk as its preferred plays for AI-driven CPU demand. Both are rated Overweight.
“Our favorite way to play CPU strength is through memory stocks,” the analysts wrote. They pointed to tight data center supply conditions expected to last at least through 2027, plus long-term supply deals forming with major cloud providers.
The bank remained skeptical about Intel’s foundry business, calling a positive outcome there “remote.”
On the same day Morgan Stanley’s note circulated, Sandisk officially joined the Nasdaq 100. But the stock slipped 1.6% to $906.48 in premarket trading.
The dip followed a 12% surge the previous Monday when Nasdaq first announced the inclusion. That “buy the rumor, sell the news” pattern is common with index additions.
Broader market pressure added to the pullback. S&P 500 futures were down 0.4% after a flare-up in U.S.-Iran tensions over the weekend raised fears about a broken ceasefire.
Atlassian is being removed from the Nasdaq 100 to make room for Sandisk. Its stock fell 1.4% in premarket as index funds rebalanced.
Wells Fargo analyst Aaron Rakers raised his price target on Sandisk to $975 from $675 on the same day, keeping an Equal Weight rating. The firm increased its 2026 EPS estimate and set its 2027 EPS estimate at $150.
Wells Fargo acknowledged it had “clearly missed” Sandisk’s run. The stock is up roughly 2,990% over the past year, fueled by surging demand for memory products in data centers.
The firm noted consensus valuation sits at around 6 to 7 times price-to-earnings on peak EPS, which it sees as capping further upside for now.
Wells Fargo’s new $975 target sits above the current premarket price, but its Equal Weight rating signals it is not urging investors to buy outright.
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