UBS reports that in the first quarter, server CPU shipments from Arm Holdings and Advanced Micro Devices grew sequentially at a faster pace than those from Intel, continuing a trend of market share gains at Intel's expense. The bank's analysis team, led by Timothy Arcuri, stated, "Total server CPU shipments increased approximately 6% sequentially (or about 19% year-over-year), which was better than the typical seasonal decline of around 7%. ARM and AMD's shipment growth outpaced Intel's, persistently eroding Intel's market share. By vendor, Intel's market share declined by approximately 370 basis points (to 54.9%), while AMD's share rose by 230 basis points (to 27.4%), and ARM's share increased by 140 basis points (to 17.7%)."
Analysts noted that ARM's market share grew year-over-year from 11.5% to 17.7%, AMD's increased from 24.1% to 27.4%, while Intel's share fell from 64.4% to 54.9%. Within the x86 market by revenue, Intel's share dropped 490 basis points (to 53.8%), while AMD's share reached 46.2%. This shift occurred as Intel's server shipments declined 1% sequentially, whereas AMD's server shipments grew 15% sequentially.
Following a 21% year-over-year growth in server CPUs in 2025, analysts do not anticipate any slowdown by 2026. They attribute this to a nearly 81% year-over-year increase in capital expenditure by hyperscale data centers and a step-change in CPU demand driven by agentic AI. "While all CPU architectures will benefit from rising AI demand in the near term, we expect hyperscalers to aggressively adopt ARM architecture for head nodes and other applications given its power efficiency. AMD is well-positioned due to its industry-leading core count and multithreading capabilities, which enable running multiple sub-agents on a single device, thus better handling agent workloads. We believe Intel's server roadmap will become more competitive with the launch of its Coral Rapids series. We also see Intel benefiting on the client side as agent workloads running locally could catalyze growth in the PC market in the medium term," stated Arcuri and his team.
Additionally, analysts pointed out that total PC CPU shipments (including desktops and mobile) for Q1 2026 declined 13% sequentially, which is 6 percentage points below the five-year average (a 7% sequential decline). This marks the second consecutive quarter of below-seasonal growth, with a 6% year-over-year decline. x86 desktop CPU shipments fell 26% sequentially (compared to a normal seasonal decline of 19%), and x86 notebook CPU shipments dropped 7% sequentially (compared to a normal seasonal decline of 5%).
By shipment volume, Intel's desktop market share grew 160 basis points sequentially (to 61.6%), but its notebook share fell 160 basis points (to 59.8%). Despite the early launch of its Panther Lake processors, Intel's combined market share declined 80 basis points to 60.2%. AMD's shipment market share grew 10 basis points (to 25.3%), and Arm's share grew 50 basis points (to 14.4%). The sequential trends in market share by revenue were similar.
Analysts noted that both Intel and AMD achieved mid-single-digit percentage increases in their PC average selling prices sequentially, which was above the typically flat normal seasonal level. UBS forecasts global PC shipments will decline approximately 11% year-over-year in 2026, citing full-year demand damage from rising memory prices. "Specifically, we believe there was some pre-buying in Q1 2026 ahead of further price increases, expecting below-seasonal growth from Q2 through Q4 2026 thereafter. Consequently, we forecast global PC shipments of approximately 242 million units," said Arcuri's team. "Looking ahead, given persistently high memory prices, potential configuration downgrades, and a more normalized replacement cycle post the Windows 11 transition, PC shipments in 2027 are expected to grow only 2% year-over-year. Nevertheless, AMD is poised to continue taking client market share directly from Intel."
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