While Intel’s stock has booked nice gains over the last year, those largely don’t relate to artificial-intelligence prowess. A KeyBanc analyst thinks that could be changing.

Intel is benefiting more from the AI wave lately, according to KeyBanc’s John Vinh, who noted late Monday that the chip maker is almost sold out of its server central processing units for the year. He expects this “significant tailwind” to continue as hyperscalers spend ever more on their data-center buildouts.

The strong demand already has Intel considering increasing average sales prices for its server CPUs by 10% to 15%, he added.

This momentum is one of the reasons Vinh just upgraded Intel’s stock to overweight from sector weight. His $60 price target represents about 36% upside from the stock’s closing price of $44.06 on Monday.

Intel’s stock rose 7.3% on Tuesday.

Additionally, Vinh said hyperscalers including Amazon Web Services, Google and Meta Platforms have been evaluating Intel’s back-end Embedded Multi-die Interconnect Bridge-T advanced chip-packaging technology for custom chip projects.

Though Vinh sees Intel’s AI strategy as “relatively nascent,” he thinks the company’s EMIB-T progress could be a catalyst.

He also said that Intel’s progress with its 18A process node is “enough to convince us it could credibly be the #2 foundry supplier in the industry ahead of Samsung.” The 18A yields, or the percentage of usable chips produced from a single wafer, have improved to more than 60%, Vinh said, and were “good enough to ramp” the company’s Core Ultra Series 3 processors, known as Panther Lake.

Although Intel is “not best in class” compared with Taiwan Semiconductor Manufacturing Company, which saw yields in the 70% to 80% range for its 2-nanometer process chips, Vinh noted that the 60% yield puts Intel in a good position to take the No. 2 spot from Samsung Electronics, which he said has yields of less than 40%.

Meanwhile, Intel Foundry Services, which manufactures chips, has won Apple as a customer for its 18A process node for the low-end M-series processors used in the company’s MacBooks and iPads, Vinh said, adding that the chips will likely start production next year.

He added that he thinks the two companies are discussing using Intel’s upcoming 14A process node for a low-end A-series of chips for the iPhone that could start production in 2029.

Intel’s stock has risen 27% to start 2026, after advancing 84% in 2025. The 2026 performance ranks third in the S&P 500 on a year-to-date basis.