Advanced Micro Devices, Inc. (AMD) and Intel Corp (INTC) both caught a nice tailwind Tuesday after KeyBanc analyst John Vinh upgraded both chipmakers, pointing to accelerating demand for AI servers even as traditional cloud infrastructure takes a breather.
The Cloud Infrastructure Picture
Here's what's happening in the data centers: December cloud data revealed a modest pullback in traditional servers as providers retired older instances, Vinh noted. Compute processor instances dropped 2% month-over-month, though they're still up a healthy 11% year-over-year. Total cloud instances followed a similar pattern, falling 2% sequentially but climbing 10% from a year ago.
The story gets more interesting when you break it down by provider. Amazon.com Inc. (AMZN) Amazon Web Services climbed 3% month-over-month. Google Cloud Platform edged up 1%. Alibaba Group Holding Limited (BABA) posted an impressive 30% year-over-year gain despite a 4% monthly decline. Azure, meanwhile, struggled with a 6% monthly drop and an 8% year-over-year decline.
Intel's Momentum Play
Vinh's analysis favored Intel over AMD on near-term instance momentum, and the numbers back that up. While Intel instances overall declined 3% month-over-month, the company's newest Granite Rapids generation jumped 12% monthly to 1,933 instances, powered by AWS deployments.
The broader Intel picture looks solid too. Emerald Rapids rose 2% month-over-month and Sapphire Rapids increased 6% monthly, pushing combined latest-generation Intel growth up 4% month-over-month. Vinh called the tracker's implications positive for Intel and neutral for AMD.