Key Takeaways
- Morgan Stanley elevated Intel’s price target from $41 to $56 based on improved server market dynamics
- The firm maintained an Equal-weight stance on Intel amid roadmap execution concerns for upcoming chip generations
- Micron and Sandisk emerge as Morgan Stanley’s top recommendations for capitalizing on AI-powered CPU growth
- Sandisk’s stock declined 1.6% in premarket trading despite securing Nasdaq 100 inclusion, following a prior 12% weekly surge
- Wells Fargo increased Sandisk’s price objective to $975 from $675 while maintaining Equal Weight coverage
Morgan Stanley upgraded its price outlook for Intel this week while declining to issue a bullish recommendation. The investment bank increased its target from $41 to $56, supported by robust server market momentum and elevated profit forecasts for 2026 and 2027.
The research team under Joseph Moore’s direction revised their 2027 earnings projection for Intel upward from $0.97 to $1.34 per share. Morgan Stanley’s current estimates now exceed the Street’s consensus figures by approximately 20% for both fiscal years.
The firm anticipates Intel’s data center division will expand at roughly a 30% annual rate during 2026, generating $21.8 billion in sales.
Nonetheless, Morgan Stanley maintained its Equal-weight classification for Intel shares. The primary hesitation centers on Intel’s technology development trajectory. Performance limitations in the upcoming Diamond Rapids server processor have been acknowledged by Intel’s chief executive, according to the analysts.
In contrast, competing AMD’s Venice chip received praise as “a clear major step forward.” Morgan Stanley also assigns an Equal-weight rating to AMD alongside a $255 price objective.
The research team believes AMD stands to capture greater benefits from server market expansion given its technological advantages. However, they observed that AMD’s share price responds more significantly to GPU developments than CPU achievements.
Memory Chip Manufacturers Lead Morgan Stanley’s Recommendations
Morgan Stanley identified Micron and Sandisk as its preferred investment vehicles for AI-related CPU demand expansion. Both companies carry Overweight ratings.
“Our favorite way to play CPU strength is through memory stocks,” the analysts wrote. They highlighted constrained data center supply dynamics projected to persist through at least 2027, combined with emerging long-term supply agreements with leading cloud infrastructure providers.
The bank expressed doubt regarding Intel’s foundry operations, characterizing a favorable result as “remote.”
Sandisk Secures Nasdaq 100 Membership
Coinciding with Morgan Stanley’s research publication, Sandisk formally entered the Nasdaq 100 index. Yet shares retreated 1.6% to $906.48 during premarket activity.
The decline arrived after a 12% jump the preceding Monday when Nasdaq initially revealed the addition. This “buy the rumor, sell the news” behavior frequently accompanies index membership changes.
Broader market weakness contributed to the pullback. S&P 500 futures dropped 0.4% following escalating U.S.-Iran tensions during the weekend that sparked concerns about a potential ceasefire collapse.
Atlassian exits the Nasdaq 100 to accommodate Sandisk’s entry. Atlassian shares declined 1.4% premarket as passive funds adjusted their holdings.
Wells Fargo analyst Aaron Rakers elevated his Sandisk price target from $675 to $975 the same day while retaining an Equal Weight classification. The firm revised its 2026 earnings per share estimate upward and established a 2027 EPS forecast of $150.
Wells Fargo admitted it had “clearly missed” Sandisk’s exceptional performance. Shares have skyrocketed approximately 2,990% over twelve months, propelled by explosive demand for memory components within data center facilities.
The firm observed that prevailing consensus valuations hover around 6 to 7 times price-to-earnings based on peak earnings estimates, which it views as limiting additional near-term appreciation potential.
Wells Fargo’s revised $975 target exceeds current premarket pricing, yet its Equal Weight rating indicates the firm is not actively recommending immediate purchases.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
