Intel Corp. shares fell 5.55 percent on Wednesday, July 15, closing at $101.78, after BofA Securities projected the company’s share of the global server processor market will decline sharply over the remainder of the decade, even as demand for artificial intelligence infrastructure continues expanding.
The report forecasts Intel’s share of the server CPU market falling to 24 percent by 2030, down from 41 percent last year, as ARM-based processors gain ground across hyperscale data centers.
Despite the selloff, Bank of America maintained a constructive long-term outlook on Intel, arguing that the company can continue growing server revenue even while losing market share.
ARM Continues Gaining Ground
According to BofA, the biggest shift taking place inside the data center is the rapid adoption of processors built on the ARM architecture.
The firm expects ARM-based chips to account for 50 percent of global server CPU revenue by 2030, up from roughly 32 percent expected this year.
Much of that growth is expected to come from commercial products developed by Nvidia, Arm Holdings and Qualcomm, while the remainder comes from custom chips designed by major cloud providers, including Amazon Web Services’ Graviton, Google’s Axion and Microsoft’s Cobalt processors.
Meanwhile, AMD is expected to maintain roughly 25 to 27 percent market share.
Under BofA’s forecast, nearly all of ARM’s gains come at Intel’s expense.
Growing Revenue, Smaller Market Share
The report’s conclusion is more nuanced than the headline suggests.
BofA does not expect Intel’s server business to shrink.
Instead, the firm projects Intel’s server revenue will continue growing at a 23.4 percent compound annual rate through 2030, supported by expanding AI infrastructure spending, strong enterprise demand and improved profitability.
In other words, Intel is expected to sell more processors than it does today while controlling a smaller percentage of a much larger market.
The overall market is simply growing faster than Intel.
PC Demand Remains a Challenge
While data-center demand continues strengthening, Intel’s personal computer business remains under pressure.
BofA expects global PC shipments to decline 10 to 15 percent this year, although stronger pricing for both server and AI-related products should partially offset that weakness.
Several of Intel’s largest AI server opportunities with cloud providers are also expected to contribute more meaningfully during the second half of 2026 and beyond.
Manufacturing Progress Provides Encouragement
The same day, Intel reported meaningful progress on its advanced manufacturing roadmap.
The company’s 18A manufacturing process achieved approximately 85 percent yield, up from 65 percent during the previous quarter.
Yield measures the percentage of usable chips produced from each semiconductor wafer and is one of the most important indicators of manufacturing efficiency and profitability.
That improvement directly addresses one of Wall Street’s biggest concerns.
Earlier this month, reports suggesting Intel’s next-generation manufacturing technology could face delays contributed to a sharp decline in the stock.
An 85 percent yield indicates manufacturing progress has been stronger than many investors feared.
Analysts Remain Divided
Wall Street continues offering dramatically different views on Intel’s future.
BofA analyst Vivek Arya upgraded Intel to Buy in June, raising his price target to $135 while expressing greater confidence in the company’s foundry strategy, advanced packaging capabilities and long-term AI opportunity.
HSBC maintains one of the most optimistic outlooks on Wall Street with a $200 price target, citing Intel’s manufacturing assets and potential government support for domestic semiconductor production.
Cantor Fitzgerald has established a $150 price target while maintaining a more cautious Neutral rating.
Intel is scheduled to report quarterly earnings on July 23, with investors expected to focus heavily on manufacturing progress, AI demand and foundry execution.
The Entire Semiconductor Sector Was Under Pressure
Wednesday’s decline was not unique to Intel.
Technology investors broadly rotated out of semiconductor stocks despite continued enthusiasm surrounding artificial intelligence.
Micron Technology declined roughly 7 percent, Lam Research lost more than 4 percent, AMD fell approximately 3 percent, and the VanEck Semiconductor ETF dropped around 2 percent as investors locked in profits following one of the strongest rallies the industry has experienced in years.
Money instead flowed toward several of the market’s largest technology companies, including Amazon, Microsoft, Alphabet and Apple.
For business leaders investing in artificial intelligence infrastructure, the report highlights an increasingly competitive server market.
As Intel, AMD, Nvidia and ARM-based providers compete more aggressively for enterprise and cloud workloads, customers are likely to benefit from faster innovation, more product choices and greater pricing competition over the coming years.
JBizNews Desk | New York
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