AI compute demand outlook viewed favorably; BNP Paribas raises target prices for NVIDIA Corporation (NVDA.US) and Intel Corporation (INTC.US), but remains cautious on the latter.

BNP Paribas continues to list NVIDIA Corporation (NVDA.US) as its top pick in the semiconductor sector and has raised its target price from $285 to $345. BNP Paribas believes that, with a complete product portfolio covering AI hardware, CUDA software, and networking products, NVIDIA Corporation is expected to maintain its leading position in the AI computing field. At the same time, as AI workloads further shift from model training to inference, the company's competitive advantage is still expected to continue. BNP Paribas also sharply raised its target price for Intel Corporation (INTC.US), from $75 to $125, but maintained its "Neutral" rating. The bank believes that continuously growing computing power demand from AI agents is expected to drive up demand for server CPUs, though whether Intel Corporation's foundry business can establish competitiveness remains the key to its future performance. AI inference demand continues to grow; BNP Paribas still favors NVIDIA Corporation BNP Paribas said the increase in NVIDIA Corporation's target price is mainly based on the company's broad AI product layout. In addition to occupying an important position in the field of AI accelerator chips, NVIDIA Corporation also has the CUDA software ecosystem and networking products, enabling it to offer a product portfolio covering multiple parts of AI computing. As the AI industry develops, computing power demand is increasingly tilting toward the "inference" stage, namely the process in which AI models perform tasks in practical applications after training is completed. BNP Paribas believes this trend is expected to continue supporting NVIDIA Corporation's market position. Despite intensifying competition from custom chips and other semiconductor manufacturers, BNP Paribas expects NVIDIA Corporation to still maintain a gross margin of more than 70%, indicating that the bank believes its product competitiveness and profitability will remain relatively resilient in the near term. Based on the above factors, BNP Paribas raised NVIDIA Corporation's target price from $285 to $345 and continues to list it as its top pick in the semiconductor sector. AI agents boost server CPU demand; Intel Corporation target price sharply raised In addition to NVIDIA Corporation, BNP Paribas also clearly raised its valuation expectations for Intel Corporation, sharply increasing the stock's target price from $75 to $125, though it still maintained a "Neutral" rating. BNP Paribas believes that, with the continuous development of AI agent applications, demand for computing resources will further expand, which may drive growth in server CPU demand and thus bring new growth opportunities for Intel Corporation. AI computing power demand is not concentrated only in GPUs and other AI accelerators. As AI agents need to call on more computing resources to perform complex tasks, the importance of traditional server CPUs may also rise accordingly. BNP Paribas believes this trend is expected to become a potential supporting factor for Intel Corporation's future business. Foundry remains a key test; progress on the 14A process is in focus However, BNP Paribas remains cautious on Intel Corporation, mainly because the outlook for its foundry business still faces considerable uncertainty. BNP Paribas analysts said Intel Corporation's 14A process will become a key indicator for testing whether the company can build a competitive foundry business. However, because visibility on important customer projects is still limited at present, the bank has chosen to stay on the sidelines for now. Therefore, although the growth in server CPU demand brought by AI agents has improved Intel Corporation's potential growth prospects and prompted BNP Paribas to sharply raise its target price, whether the foundry business can make substantive progress will still be an important factor determining whether the market can further re-rate Intel Corporation. By contrast, BNP Paribas is more positive on NVIDIA Corporation. The bank believes that, against the backdrop of continuously growing AI computing demand and workloads gradually shifting toward inference, NVIDIA Corporation, with a complete ecosystem formed by chips, CUDA software, and networking products, is expected to continue maintaining its leading position and sustain a gross margin of more than 70% amid intensifying competition.