The artificial intelligence (AI) infrastructure trade has shifted from pure-play generative AI-based semiconductors to other AI-powered data center infrastructures. Moreover, the explosion of agentic AI is expanding the scope of AI infrastructure providers in the physical layer across industries.
In line with this trend, Advanced Micro Devices Inc. AMD and Intel Corp. INTC are two AI chip giants that have significantly outperformed NVIDIA Corp. NVDA with triple-digit returns year to date. Despite this blockbuster performance, these two stocks have huge price upside left in the short term.
Currently, AMD and INTC carry a Zacks Rank #3 (Hold) each. On the other hand, NVDA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows year-to-date price performance of the three stocks mentioned above.
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Advanced Micro Devices Inc.
Advanced Micro Devices is broadening its data center AI opportunity from Instinct accelerators to the Helios rack-scale platform. In the second quarter of 2026, Data Center revenue rose 107% year over year to $6.7 billion, while Instinct sales more than doubled.
Helios is in production, with initial shipments expected late in the third quarter and a larger ramp in the fourth quarter and in 2027. Anthropic plans to deploy up to 2 gigawatts of MI450-series GPUs, with the first gigawatt beginning in the first half of 2027, while Microsoft plans to deploy Helios at scale on Azure. AMD expects Data Center segment revenues to more than double year over year in 2027.
EPYC Growth Broadens
AI workloads are increasing CPU requirements for host nodes, agentic servers and general-purpose infrastructure, supporting a larger server opportunity. In the second quarter of 2026, EPYC sales increased more than 70% year over year, with cloud and enterprise sales each growing more than 70%.
Sixth-generation EPYC Venice is now in production on 2-nanometer technology, and major OEMs are preparing platforms while leading cloud providers plan deployments later in 2026. Advanced Micro Devices expects server revenue to grow more than 80% year over year in the second half of 2026 and more than 70% in 2027, while estimating the server CPU market at about $220 billion by 2030.
Cloud and Enterprise Adoption Rises
Hyperscalers continue to broaden EPYC deployments across cloud, enterprise and AI workloads. More than 1,600 EPYC public cloud instance types were available globally in the second quarter of 2026, with fifth-generation Turin powering nearly one-third of them.
Enterprise momentum also persisted, with AMD reporting a fourth consecutive quarter of record sell-through and large deployments across financial services, manufacturing, telecom, retail and technology customers. Management expects continued server share gains as Venice deployments begin later in 2026.
Strong Guidance
For the third quarter of 2026, AMD expects revenues of approximately $13 billion, +/- $300 million. The midpoint implies growth of roughly 41% year over year and 13% sequentially. AMD expects strong double-digit sequential growth in Data Center and Embedded. Non-GAAP gross margin is projected at approximately 56%.
Solid Estimate Revisions
Advanced Micro Devices has an expected revenue and earnings growth rate of 45.4% and 79.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 2.6% over the last 30 days.
AMD has an expected revenue and earnings growth rate of 62.9% and 95.5%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 0.4% over the last seven days.
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Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 29.6% from the last closing price of $480.93. The brokerage target price is currently in the range of $410-$1,250. This indicates a maximum upside of 159.9% and a downside of 14.5%.
Intel Corp.
Intel is making measurable progress in data center processors and purpose-built silicon, which is important as AI infrastructure demand broadens beyond GPUs into CPUs, connectivity and custom compute. INTC also cited strong hyperscale and enterprise demand, new long-term agreements and improved server CPU industry expectations for 2026 and 2027.
INTC has expanded its AI infrastructure portfolio with three new platforms designed to support agentic AI across data centers, enterprise systems and intelligent edge devices. The company introduced Diamond Rapids, Crescent Island and Wildcat Lake to address growing AI demands across data centers and intelligent devices.
Carving a Niche in AI Ecosystem
Intel's AI PC and edge strategy is gaining traction as AI workloads move closer to the device and enterprise customers seek more efficient local processing. INTC is building a broader AI infrastructure platform that includes CPUs, ASICs, graphics, networking and advanced packaging. This is important because customers are increasingly designing workload-specific systems rather than relying on a single compute architecture.
In the second quarter of fiscal 2026, purpose-built silicon revenues increased about 20% sequentially and nearly tripled year over year, reaching an estimated $2 billion run rate, with management targeting $4 billion in the not-too-distant future.
The company also cited new customer wins, including Fortinet in security ASICs, and multi-year collaboration activity with SambaNova. Design services revenue nearly tripled year over year, while advanced packaging customer interest and backlog continued to grow.
Intel's EMIB-T packaging met yield and reliability goals and is ramping for customer demand in 2027. These developments point to a more diversified AI exposure, with Intel positioned to participate in custom silicon and system-level infrastructure demand.
AI PC and Edge Momentum Broaden Growth Drivers
In the fiscal second quarter, Client Computing and Physical AI Group revenues rose 15% sequentially to $8.9 billion, with AI PC revenues up 26% sequentially and now representing about two-thirds of segment revenues. The 18A platform is also moving into broader product scale, with more than 400 Series 3 designs live across consumer and commercial systems.
INTC has also secured 130 Series 3 edge AI design wins across use cases such as robotics and control systems, while edge deployments account for roughly 10% of CCPG revenues. Commercial traction remains visible through vPro manageability software activations, which increased 1,500% year over year over the last four quarters. These indicators support INTC’s positioning across PCs, edge AI and managed enterprise environments.
Strong Guidance
For the third quarter of 2026, INTC expects GAAP revenues in the range of $15.8-$16.8 billion. Non-GAAP gross margin is expected to be 42%. Non-GAAP earnings are expected to be around 38 cents per share. Non-GAAP tax rate is anticipated to be 11%.
Solid Estimate Revisions
Intel has an expected revenue and earnings growth rate of 17.5% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1.4% over the last 30 days.
INTC has an expected revenue and earnings growth rate of 13.7% and 33.6%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 33.3% over the last 60 days.
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Huge Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 29.5% from the last closing price of $88.24. The brokerage target price is currently in the range of $75-$200. This indicates a maximum upside of 126.7% and a maximum downside of 15%.
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This article originally published on Zacks Investment Research (zacks.com).