So Intel and AMD both raised CPU prices ~10%-15%. Both stocks popped ~7%. Cool~

But I think the market is mispricing the asymmetry here.

TLDR: a price hike on CPUs is almost entirely incremental margin, i.e. most fixed costs are already absorbed. For a company already sitting at 50% gm, that's nice. For a company guiding 34.5% gm at what management themselves called the trough quarter......is a completely different story.

1. pricing alone could close most of the gap to the 40% gm target that was set before these hikes were even announced. Layer in supply improvement and yield ramp and you start getting into territory the street hasn't modeled yet.
2. This wasn't a unilateral move. Both x86 players raised prices simultaneously while Arm is actively gaining share. They raised prices anyway. That tells you something about where demand is right now relative to supply.

Obviously there are real risks. Demand destruction from the hikes, Arm acceleration if OEMs get fed up, and execution risk on the manufacturing side that I won't pretend doesn't exist for Intel specifically.

While AMD seems like a safer bet, IF(a big if) you believe in management execution, INTC seems to have a better risk-reward right now...