Following Intel's (INTC.US) submission of its annual 10-K report, which includes fourth-quarter results, Wells Fargo highlighted the notably significant performance of the semiconductor giant's external foundry revenue and the potential benefits this situation may create for AMD (AMD.US). For the period ending December 27, 2025, Intel's foundry business revenue reached $4.51 billion, while its total revenue for the same period was $13.67 billion. In response to these financial figures, Wells Fargo analyst Aaron Rakers maintained an "Equal Weight" rating on Intel and set a price target of $45. Wells Fargo analyst Aaron Rakers noted in a client report that Intel's full-year external foundry revenue amounted to $307 million, with fourth-quarter revenue alone hitting $222 million, marking a significant increase from $159 million in the same period of 2024. However, Rakers added that this growth was partially attributable to Intel's sale of a portion of its Altera business to private equity firm Silver Lake in September 2025—following the completion of this transaction, Altera was deconsolidated from Intel's financial statements, a change that precisely contributed to the incremental external revenue in the fourth quarter. Furthermore, while interpreting the 10-K report, Wells Fargo analyst Aaron Rakers pointed out that Intel's server CPU unit shipments increased by 9% year-over-year in 2025, but the average selling price (ASP) declined by 4%. This price fluctuation stemmed primarily from two factors: first, the proactive pricing strategy the company adopted in the first half of the year; and second, a structural shift caused by an increased proportion of lower-core-count products. Rakers further analyzed that although server CPU unit shipments achieved an 8% year-over-year growth in the fourth quarter, this growth rate had already decelerated from the peak level of 13% seen in the second quarter and was consistent with the growth rate of the third quarter. Rakers elaborated further: "Although we have not yet obtained preliminary estimates for fourth-quarter 2025 server unit shipments, we note Micron's (MU.US) optimistic forecast for calendar year 2025 server shipments—projecting approximately 15% year-over-year growth, reflecting a strong acceleration in demand in the second half of 2025; concurrently, Gartner data indicates only 1% year-over-year growth in this sector for the first three quarters of 2025. Based on this information, we estimate that fourth-quarter 2025 server unit shipments could achieve 15% to 17% year-over-year growth. Against this backdrop, we project Intel's Xeon CPU shipments will grow 8% year-over-year in the fourth quarter, a performance that makes us more optimistic about AMD's server shipment growth prospects for the same period." By the close of trading on Friday, Intel's stock price had plunged more than 17%, while AMD's stock price had risen over 2%.
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