Rumor has it that PC CPU prices will increase by another 10% in October, and investment bank Northland raised the Intel (INTC.US) rating to “outperform the market”: the shortage of servers gave pricing power

The Zhitong Finance App learned that the investment bank Northland Securities upgraded the Intel (INTC.US) rating from “synchronizing with the market” to “outperforming the market”, with the latest target price of $120. Earlier, according to supply chain sources, the price of Intel PC CPUs is expected to increase again by about 10% on October 5, 2026.

Stimulated by rumours of product price increases, Intel's stock price rose more than 5% in pre-market trading.

Analyst Gus Richard said the company has made “substantial progress” in its transformation process. He also noted that Intel is likely to continue to benefit from the ongoing shortage of server CPUs. Furthermore, the collaboration between Intel and Tesla on the Terafab semiconductor project will bring “significant benefits” to its foundry business.

Supply chain sources revealed that on October 5, 2026, the price of Intel PC CPUs is expected to increase by another 10%. At the same time, small-core product lines with low gross margins may start discontinuation of production and delisting (EOL). Optimizing the profit structure by cutting out low-margin products is the core idea of Intel CEO Chen Liwu in this round of strategic adjustments.

Since the end of 2025, Intel PC CPU prices have continued to rise due to a sharp rise in overall costs. It was raised by about 10% in the first quarter of 2026, and prices for some consumer-grade and server CPUs were adjusted in July. The increase ranged from tens of dollars to thousands of dollars per unit.

Industry agencies estimate that global PC shipments will be around 260 million units in 2026, and may drop slightly to 250 million units in 2027. The core reason is not a sharp drop in PC demand, but the recent sharp rise in prices for components such as memory and PCBs, and the pressure on the cost of complete terminals continues to accumulate.

In 2026, PC manufacturers still have some low-price old inventory in their hands, which can absorb the pressure brought about by the price increase of components. However, by 2027, products using a new round of high-priced components will be put into batch production, and the pressure on PC price increases will become even more prominent, which may suppress users' desire to switch devices.

Against the backdrop of PC terminal market expectations weakening slightly in 2027, Intel still chose to raise CPU prices, which is enough to show that increasing gross margin is the first priority. The strategy of using price cuts to seize market share in the past is no longer applicable.

The industry revealed that if Intel were to reduce its low-margin small-core product line, it would not necessarily be mainstream PCs, but rather long-life cycle markets such as industrial computers (IPC), Internet of Things (IoT), and embedded. Once these demands are released, Arm manufacturers such as Qualcomm and MediaTek are expected to take the opportunity to enter. Especially in the IPC, edge computing, and IoT markets, ArmSoC has the advantages of high integration and low power consumption.

The server CPU business is “more difficult” and production capacity continues to be tight

The latest report indicates that compared to the PC CPU business, server CPUs are currently the more difficult sector for Intel. Intel is facing a continued shortage of server CPUs. The company's management previously predicted that 2026-2028 server CPU shipments will maintain a high double-digit growth rate, and the boom cycle will continue until 2028.

The supply chain points out that currently Intel's own fab's production capacity prioritizes the supply of server CPUs, and the gross margin of this business is also higher than that of TSMC's foundry portion. Even so, server CPU production capacity is still tight, crowding out PC CPU production capacity. If Intel wants to further expand its server CPU business, or hand over part of the order to TSMC OEM.

Matt Bryson, an analyst at Wedbush Securities, said earlier that the continued shortage of server CPUs has given Intel the flexibility to raise prices without harming demand. He said that the key issue at present is not whether Intel can raise prices, but rather where the price increase falls. Since server chips account for a larger share of Intel's business, if the price increase is generally implemented, it means that Intel has regained pricing power for the first time in many years, reflecting a tight supply pattern.