By Tae Kim

Advanced Micro Devices and Intel are being tagged for an imminent business turnaround by Raymond James.

On Monday, the two major PC chip makers received recommendations from the investment bank's Srini Pajjuri. The analyst raised his price targets for AMD stock (ticker: AMD) to $115 from $100 and Intel stock (INTC) to $33 from $30. Pajjuri has a Strong Buy rating for AMD and an Outperform rating for Intel.

AMD and Intel use the x86 chip architecture in making processors that act as the main computing brains for PCs and servers.

PC industry sales have deteriorated over the last few quarters. Worldwide shipments of PCs fell 28% in the December quarter from a year earlier after a 15% year-over-year decline in the September quarter, according to research firm IDC, which cited a continued unwinding of the pandemic-era boom.

But Pajjuri believes computer sales will soon rebound after visits with more than 20 PC component companies in Asia over the past week. The firms "we met [in Taiwan and Korea] with are seeing early signs of recovery in commercial and gaming notebook/monitor orders while consumer PC demand remains subdued," he wrote.

In midday trading, AMD stock fell 3.6% to $94.32, while Intel declined 3.3% to $28.83.

The analyst expects AMD's PC chip revenue to improve after the March quarter as PC demand gets better. He said Intel should also benefit from rising corporate demand later this year.

"We believe the worst is behind for most of our coverage," he wrote. We "see further outperformance" for semiconductor stocks.

AMD and Intel shares have fallen by 16% and 39%, respectively, over the last 12 months.